Economic Fluctuations and Crime

Temporary and Persistent Effects

Research output: Contribution to journalArticle

2 Citations (Scopus)
5 Downloads (Pure)

Abstract

Purpose: Since the literature on the effect of the unemployment rate as reflection of economic fluctuations on crime shows an empirically ambiguous effect, this study argues that a new way of modelling the dynamics of unemployment and crime by focusing on the transitory and persistent effect of unemployment on crime helps resolve this ambiguity.
Design: Panel data for US states from 1965-2006 are examined using the Mundlak (1978) methodology to incorporate the dynamic interactions between crime and unemployment into the estimation.
Findings: After decomposing the unemployment effect on crime into a transitory and persistent effect, evidence of a strong positive correlation between unemployment and almost all types of crime-rates is unearthed. This evidence is robust to endogeneity and the controlling for cross-panel correlation and indicators for state imprisonment.
Originality: The paper is the first to examine the dynamics of the interaction of crime and economic fluctuations using the temporary and persistent effects framework of Mundlak (1978). In one set of estimates, one can evaluation both the short- and long-run effects of changes of unemployment on crime.
Original languageEnglish
Pages (from-to)609-623
Number of pages15
JournalJournal of Economic Studies
Volume43
Issue number4
DOIs
Publication statusPublished - 2016

Fingerprint

Economic fluctuations
Crime
Unemployment
Interaction
Imprisonment
Panel data
Short-run
Unemployment rate
Methodology
U.S. States
Crime rates
Modeling
Endogeneity
Evaluation

Keywords

  • crime
  • unemployment
  • panel models
  • Hausman-Taylor specification

Cite this

Economic Fluctuations and Crime : Temporary and Persistent Effects. / Bender, Keith; Theodossiou, Ioannis.

In: Journal of Economic Studies, Vol. 43, No. 4, 2016, p. 609-623.

Research output: Contribution to journalArticle

@article{729f7034d5fc44479ee82bd1ce934d66,
title = "Economic Fluctuations and Crime: Temporary and Persistent Effects",
abstract = "Purpose: Since the literature on the effect of the unemployment rate as reflection of economic fluctuations on crime shows an empirically ambiguous effect, this study argues that a new way of modelling the dynamics of unemployment and crime by focusing on the transitory and persistent effect of unemployment on crime helps resolve this ambiguity. Design: Panel data for US states from 1965-2006 are examined using the Mundlak (1978) methodology to incorporate the dynamic interactions between crime and unemployment into the estimation.Findings: After decomposing the unemployment effect on crime into a transitory and persistent effect, evidence of a strong positive correlation between unemployment and almost all types of crime-rates is unearthed. This evidence is robust to endogeneity and the controlling for cross-panel correlation and indicators for state imprisonment.Originality: The paper is the first to examine the dynamics of the interaction of crime and economic fluctuations using the temporary and persistent effects framework of Mundlak (1978). In one set of estimates, one can evaluation both the short- and long-run effects of changes of unemployment on crime.",
keywords = "crime, unemployment, panel models, Hausman-Taylor specification",
author = "Keith Bender and Ioannis Theodossiou",
year = "2016",
doi = "10.1108/JES-05-2015-0085",
language = "English",
volume = "43",
pages = "609--623",
journal = "Journal of Economic Studies",
issn = "0144-3585",
publisher = "Emerald Group Publishing Ltd.",
number = "4",

}

TY - JOUR

T1 - Economic Fluctuations and Crime

T2 - Temporary and Persistent Effects

AU - Bender, Keith

AU - Theodossiou, Ioannis

PY - 2016

Y1 - 2016

N2 - Purpose: Since the literature on the effect of the unemployment rate as reflection of economic fluctuations on crime shows an empirically ambiguous effect, this study argues that a new way of modelling the dynamics of unemployment and crime by focusing on the transitory and persistent effect of unemployment on crime helps resolve this ambiguity. Design: Panel data for US states from 1965-2006 are examined using the Mundlak (1978) methodology to incorporate the dynamic interactions between crime and unemployment into the estimation.Findings: After decomposing the unemployment effect on crime into a transitory and persistent effect, evidence of a strong positive correlation between unemployment and almost all types of crime-rates is unearthed. This evidence is robust to endogeneity and the controlling for cross-panel correlation and indicators for state imprisonment.Originality: The paper is the first to examine the dynamics of the interaction of crime and economic fluctuations using the temporary and persistent effects framework of Mundlak (1978). In one set of estimates, one can evaluation both the short- and long-run effects of changes of unemployment on crime.

AB - Purpose: Since the literature on the effect of the unemployment rate as reflection of economic fluctuations on crime shows an empirically ambiguous effect, this study argues that a new way of modelling the dynamics of unemployment and crime by focusing on the transitory and persistent effect of unemployment on crime helps resolve this ambiguity. Design: Panel data for US states from 1965-2006 are examined using the Mundlak (1978) methodology to incorporate the dynamic interactions between crime and unemployment into the estimation.Findings: After decomposing the unemployment effect on crime into a transitory and persistent effect, evidence of a strong positive correlation between unemployment and almost all types of crime-rates is unearthed. This evidence is robust to endogeneity and the controlling for cross-panel correlation and indicators for state imprisonment.Originality: The paper is the first to examine the dynamics of the interaction of crime and economic fluctuations using the temporary and persistent effects framework of Mundlak (1978). In one set of estimates, one can evaluation both the short- and long-run effects of changes of unemployment on crime.

KW - crime

KW - unemployment

KW - panel models

KW - Hausman-Taylor specification

U2 - 10.1108/JES-05-2015-0085

DO - 10.1108/JES-05-2015-0085

M3 - Article

VL - 43

SP - 609

EP - 623

JO - Journal of Economic Studies

JF - Journal of Economic Studies

SN - 0144-3585

IS - 4

ER -