The Net Effect of the Business Cycle on Crime and Violence
34 Pages Posted: 9 Aug 2010
Date Written: July 13, 2010
The paper analyzes the causal effects of the business cycle on crime. Among the main conclusions are that robbery and burglary are countercyclical, motor vehicle theft is pro-cyclical, and criminal homicide is acyclical. We also analyze suicide patterns, finding that while suicide rates overall are countercyclical, suicide rates by younger teens are actually procyclical. The paper begins with a discussion of causal mechanisms linking economic conditions to crime and violence, both overall and for youths. We investigate the effect of short-term fluctuations in economic activity on crime and violence (and on arrest rates) using the quasi-experimental analysis of the last 13 business cycles (beginning in 1933). We then develop and implement a second approach, a regression analysis on detrended data, and report the results. The regression analysis generally confirms the qualitative results from the quasi-experimental approach, and provides estimates of magnitudes.
Keywords: Crime, Business Cycle
JEL Classification: K42, E32
Suggested Citation: Suggested Citation