How Do Labor Markets Affect Crime? New Evidence on an Old Puzzle

37 Pages Posted: 5 Apr 2010

See all articles by David B. Mustard

David B. Mustard

University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics; IZA Institute of Labor Economics; University of Georgia Law School

Abstract

For nearly 50 years academics have been studying how labor markets affect crime. The initial interesting and important theoretical and empirical work generated substantial interest in studying crime among economists, in particular, and scholars in the social sciences more broadly. This literature, which is decades old and contains hundreds of papers, is characterized by an intriguing puzzle - the large gap between the theory and empirical work. While the hypothesis that growing labor markets reduce crime seems obvious and is widely accepted by many policy makers and academics, empirical results fail to show consistent evidence in support of this theory. The primary contribution of this chapter is to document how recent research - primarily since the late 1990s - makes substantial progress in resolving this disconnect between the theory and empirics. To accomplish this goal, I discuss a few very important empirical problems that until the last 10 years have not been systematically addressed. The central conclusion of this chapter is that recent research that addresses these important questions consistently provides evidence to buttress the contention that labor market opportunities have important effects on crime, especially property crime.

Keywords: wages, unemployment, labor markets, crime

JEL Classification: J2, K14, K42

Suggested Citation

Mustard, David B., How Do Labor Markets Affect Crime? New Evidence on an Old Puzzle. IZA Discussion Paper No. 4856. Available at SSRN: https://ssrn.com/abstract=1584187

David B. Mustard (Contact Author)

University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics ( email )

Athens, GA 30602-6254
United States
706-542-3624 (Phone)
706-542-3376 (Fax)

HOME PAGE: http://www.terry.uga.edu/~dmustard/

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

University of Georgia Law School

225 Herty Drive
Athens, GA 30602
United States

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