City Business Cycles and Crime

Abstract

We explore the influence of city-level business cycle fluctuations on crime in 20 large cities in the United States. Our monthly time-series analysis considers seven crimes over an approximately 20-year period: murder, rape, assault, robbery, burglary, larceny, and motor vehicle theft. Short-run changes in economic conditions, as measured by changes in unemployment and wages, are found to have little effect on city crime across many cities, but property crimes are more likely to be influenced by changes in economic conditions than are more violent crimes. Contrary to the deterrence hypothesis, we find strong evidence that in many cities more arrests follow an increase in crime rather than arrests leading to a decrease in crime. This is true especially for the more visible crimes of robbery and vehicle theft and suggests that city officials desire to remove these crimes from the public's view.

Temporal Causality and the Dynamics of Crime and Delinquency

“…They find a 10% increase in the growth of wages reduced the growth of various crimes by 4-6%. Garrett and Ott (2008) explore the influence of city-level business cycle fluctuations on crime in 20 large cities in the United States. 6 Although some general patterns have emerged regarding the relationship between crime and economic activity, we can say that the results of past studies do not provide any conclusive evidence.…”