Does unemployment increase crime? Evidence from Italian provinces

Abstract

Criminality is one of the most worrying phenomena that affect economic development and social well-being. Authorities employ various schemes to prevent and discourage illegal behaviours. This article presents an analysis of the economic determinants of crime in Italy, with a special focus on unemployment effect on crime. Using a dynamic specification for the 103 Italian provinces over the period 2000 to 2005, results are in line with the predictions of the economic model of crime (Becker, 1968). The deterrence variables have the expected sign in all crime rates. The unemployment rates have a positive correlation with all crime rates. The juvenile unemployment rate shows a lower estimated coefficient than that of the overall unemployment rate.

Keywords:

• crime
• panel data
• unemployment
• deterrence

JEL Classification:

• K40
• C13

Acknowledgements

I would like to thank Mauro Costantini, Paolo Buonanno and the seminar participants at University of Salerno for valuable comments and suggestions.