Good job market tough on crime

A weekly presentation of downloadable charts and short analyses designed to graphically illustrate important economic issues. Updated every Wednesday.

Snapshot for August 2, 2000

Good job market tough on crime
As the nation continues to “get tough” on crime by mandating longer sentences and building more prisons, the clear link between crime and labor market opportunity is often ignored in policy debates.

The economic theory of crime posits that changes in economic incentives can influence the choice between crime and work. When all else is equal, an individual will choose between crime and work based on which is the more lucrative of the two activities. That means that as employment opportunities improve, particularly for people in the low-wage sector, crime will fall as work becomes more attractive to potential offenders.

Jobless rates have been declining for low-wage workers during this recent period of sustained economic expansion and low overall unemployment. For the group of workers whose labor market characteristics most resemble that of the offender/ex-offender population, we see expanded labor market opportunities have contributed to falling crime rates.

Among young black men with a high school degree or less, unemployment fell to its lowest level since 1989. Over the expansion, unemployment among young black men fell from 26.6% in 1992 to 19.3% in 1998, or by almost 7 percentage points. Crime rates have fallen from 5,660 crimes per 100,000 residents in 1992 to 4,616 per 100,000 residents in 1998, or by 18.5%.

Source: Bernstein, Jared, and Ellen Houston. 2000. Crime and Work.

This week’s Snapshot by EPI economist Ellen Houston.