Unemployment and crime: An empirical investigation

Daniel Y. Lee, Stephen J. Holoviak

Research output: Contribution to journalArticle

17 Scopus citations

Abstract

This paper examines the relationship between labour market conditions and various crime series in three Asia-Pacific countries: Australia, Japan and South Korea. Johansen's maximum likelihood cointegration tests are applied to annual, aggregate data to see whether there exists a long-run equilibrium relationship between unemployment and crime variables. In a society with a high unemployment rate, especially among young males, the opportunity cost of crime is relatively low so that criminal activities tend to increase. Although theoretically well-formulated, previous empirical studies of this hypothesis have yielded mixed evidence. The results of this study, however, appear to provide strong support for a long-run equilibrium relationship between unemployment and several crime series. This may be due to the use of cointegration method in the study, which is quite common in the area of economics and finance, but has not been applied extensively to the study of crime. Empirical support seems to be even stronger for the relationship between unemployment among young males and crime.

Original languageEnglish (US)
Pages (from-to)805-810
Number of pages6
JournalApplied Economics Letters
Volume13
Issue number12
DOIs
StatePublished - Oct 10 2006

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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