The Effects of Economic Conditions on Crimes

Abstract

Using quarterly data for the period January 1982 to April 2004, this paper examines the causal effects of economic conditions on crimes in Korea, employing the standard set of time-series techniques recently developed. Empirical evidence suggests that income inequality and unemployment positively Granger-cause theft, while income level does not. Income level has a negative effect and unemployment has a positive effect on assault, while income inequality does not have a significant effect. This evidence may imply different effects of relative and absolute deprivation on different types of crimes, and support the institutional role of steady employment in controlling criminal behavior often emphasized in sociology and criminology.