INCOME, UNEMPLOYMENT, AND CRIME: A TIME-SERIES ANALYSIS OF THE RELATIONSHIP BETWEEN CRIME RATES AND LABOR MARKET OPPORTUNITIES IN THE UNITED STATES, 1998-2012

Abstract

This paper investigates the effect that labor market opportunities of non-collegeeducated men and college-educated women have on crime rates in the United States from 1998-2012. Using state level data with state and time fixed effects, this paper finds evidence that property crime rates, with the exception of motor vehicle theft, move negatively with wage rates and positively with unemployment rates of both groups, with some significant individual rate results. For violent crime rates and motor vehicle theft, however, results point to a positive relationship with wage rates and negative relationship with unemployment, again with significant individual rate results. This second group of results is contrary to the large body of literature on violent crime rates and labor market opportunities.