Still unemployed, what next? Crime and unemployment duration

Abstract

In this paper, I study the relationship between unemployment benefits, labour market conditions and crime in the light of increasing unemployment durations and temporary benefit extensions in the US. First, I find a positive reduced form effect of the benefit extensions on property crime. Second, I explore the mechanisms of the reduced form in an IV model and find that higher unemployment and longer unemployment durations are linked to higher property crime rates. These findings can rationalise the reduced form effect: Longer benefit durations are linked to longer unemployment durations which in turn contribute to increased propensities for criminal activity.