Crime and Economy

I don’t know the literature on this topic well enough to be able to say whether or not this claim that it is difficult to find a link between macroeconomic conditions and crime is accurate:

Crime and Economy, by James Q. Wilson, Commentary, LA Times: …During the last two decades, scholars have made great progress in explaining why some individuals are more likely than others to commit crimes, but very little in explaining why the crime rate … rises or falls.

Everyone knows that there is more crime in economically depressed inner-city neighborhoods than in affluent suburbs. That fact leads naturally to the assumption that if a community becomes more prosperous, crime rates will go down, and if income levels decline, crime rates go up. Economists who have checked this view have discovered that it is often true, but not always. …

A lot of other factors affect the crime rate… It often goes up when the population gets younger, and when drug abuse becomes more common. Murder rates are profoundly influenced, at least in big cities, by gang activity. …

So can the economy help explain fluctuations in crime? Sometimes yes, sometimes no. It would be difficult to link rising crime during the prosperous 1960s to economics. On the other hand, a declining economy provides a plausible theory to explain increases in crime during the 1990s. Matters become even more complicated if one goes back to the Depression of the 1930s. We had no FBI data on crime rates at that time, but several studies of individual cities suggest that crime rates fell even though one-quarter of all Americans were unemployed. Why? One reasonable hypothesis is that the Depression pulled families together, and this cohesion inhibited crime. …

The role of the police in reducing crime is often overlooked by those preoccupied with the jobs-crime link. The sharp decline in crime in New York — and now in Los Angeles — has a lot to do with how those police departments changed. …

To try to sort out the combined and complex relations between crime and the economy, the age of the population, imprisonment, police work, neighborhood culture and gang activity, the National Academy of Sciences Committee on Law and Justice (which I chair) has begun an effort to explain something that no one has yet explained: Why do crime rates change? If you have any good ideas, let me know.


Originally published at the Economist’s View reproduced here with the author’s permission.

One Response to "Crime and Economy"

  1. Brian Von Herzen   January 10, 2009 at 11:49 am

    Ending prohibition had the biggest effect on organized crime reduction than anything else. Gee, if it worked so well in the 1930’s, why not end prohibition today and treat drug users like the alcoholics they are in patient facilities rather than treat them in penal institutions of higher learning?Try playing SimCity 3000. They have modeled crime rate as a function of a large array of factors as to how the cities are managed by the player.