2 INTRODUCTION Conventional Wisdom: “street” crime is countercyclical Controversy: many exceptions 1982: year the worst postwar recession hit bottom 1960s: period of sustained economic growth and declining unemployment 3 EXAMPLES OF WHY MIGHT CRIME BE LINKED TO ECONOMIC CONDITIONS 1.Legitimate Opportunities 2.Criminal Opportunities 3.Use of Criminogenic Commodities 4.The Criminal Justice System Response to Crime 4 5 SOCIAL ASPECTS OF THE BUSINESS CYCLE – THOMAS (1927) • Related various detrended measures of crime with an indicator of business conditions for Britain • Findings • Robbery and Burglary (-.44) • Larceny (-.25) • Violent Crimes (+.06) 6 AN ECONOMIC ANALYSIS OF CRIME AND PUNISHMENT IN ENGLAND AND WALES, 1894-1967 – WOLPIN (1978) • • Analyzed unemployment, GDP per capita, and weekly wage for manual manufacturing workers against crime data Findings: • Robbery and burglary • Homicide 7 CRIME AND THE BUSINESS CYCLE – COOK AND ZARKIN (1985) “For two important types of crimes, robbery and burglary, there is strong evidence of a countercyclical pattern. Recessions do indeed increase the rate at which these crimes are committed. These conclusions are supported by both nonparametric and regression analysis of U.S. crime rates since 1933.” 8 9 10 YEAR CRIME TREND IN NORTH CAROLINA 6,000 5,000 4,000 3,000 2,000 1,000 0 Index Rate Violent Rate Property Rate Murder Rate Rape Rate Robbery Rate Assault Rate Burglary Rate Larceny Rate Source: North Carolina Department of Justice 10 2007-2009: DECLINE IN CRIME IN NC Source: North Carolina Department of Justice, Census Estimates 11 2007-2009: DECLINE IN CRIME IN NC Source: North Carolina Department of Justice, Census Estimates 12 WHY DID CRIME NOT INCREASE? 1. Drug Markets A. 1970’s: Heroin B. Late 1980’s – Early 1990’s: Crack 2. Policing A. Compstat-type accountability systems B. Real-time crime information 3. Target Hardening A. Cell phones/cameras B. New car security systems 13 WHY DID CRIME NOT INCREASE? 4. Economic Stimulus A. Economic stimulus spending, especially unemployment benefits 5. Declining Criminal Opportunities A. High unemployment rates -> occupied houses B. People carry less cash/valuables 6. Demographics A. Median age at highest point ever in 2010 7. Incarceration A. US has highest incarceration rate 14