A non-stationary panel data investigation of the unemployment-crime relationship.
Many empirical studies of the economics of crime focus solely on the determinants thereof, and do not consider the dynamic and cross-sectional properties of their data. As a response to this, the current paper offers an in-depth analysis of this issue using data covering 21 Swedish counties from 1975 to 2010. The results suggest that the crimes considered are non-stationary, and that this cannot be attributed to county-specific disparities alone, but that there are also a small number of common stochastic trends to which groups of counties tend to revert. In an attempt to explain these common stochastic trends, we look for a long-run cointegrated relationship between unemployment and crime. Overall, the results do not support cointegration, and suggest that previous findings of a significant unemployment-crime relationship might be spurious.
Department of Economics, Lund University, P.O. Box 7082, 220 07 Lund, Sweden. Electronic address: johan.blomquist@slu.se.
Johan
J
Blomquist
Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance, Australia.
Joakim
J
Westerlund
D003415:Crime; D003430:Cross-Sectional Studies; D057172:Economic Recession; D006801:Humans; D009042:Motivation; D013548:Sweden; D013800:Theft / Q000191:economics*; D014478:Unemployment
Cointegration; Crime; Cross-section dependence; Panel data; Unemployment; Unit roots