Does Unemployment Lead to Crime?

Abstract

This papers considers the postulated link between crime and unemployment. It outlines the main theoretical premises for such a relationship and critically summarises the empirical work to date before introducing the specific approach used in the analysis reported here. This is essentially a cross section econometric analysis of crime rates which concludes that unemployment per se has no direct influence on the level of crime. There is evidence that previous studies which reported such a connection were erroneous and that these errors resulted from a confusion between unemployment and the more general concept of economic welfare. Further analysis reveals that there is no evidence that crime is higher among ethnic minorities or in non-rural communities, nor unfortunately that increased policing actually reduces crime.