Crime, Urban Flight, and the Consequences for Cities
John M. Olin Center for Law, Economics, and Business, Harvard Law School, Discussion Paper No. 199
Posted: 5 Feb 1997
Date Written: September 1996
This paper demonstrates that rising crime rates in cities are correlated with city de-population. Instrumental variables estimates, using measures of the certainty and severity of a state's criminal justice system as instruments for city crime rates, imply that the direction of causality runs from crime to urban flight. Using annual, city-level panel data, our estimates suggest that each additional reported crime is associated with a one person decline in city residents. There is some evidence that increases in suburban crime tend to keep people in cities, although the magnitude of this effect is small. Analysis of individual-level data from the 1980 census confirms the city-level results and demonstrates that almost all of the crime-related population decline is attributable to increased out-migration rather than a decrease in new arrivals to a city. Those households that leave the city because of crime are much more likely to remain within the SMSA than those leaving the city for other reasons. The migration decisions of high-income households and those with children are much more responsive to changes in crime than other households. Crime-related mobility imposes costs on those who choose to remain in the city through declining property values and a shrinking tax base.
JEL Classification: K42, R23
Suggested Citation: Suggested Citation