PT  - JOURNAL ARTICLE
AU  - Lin, Ming-Jen
TI  - Does Unemployment Increase Crime?
AID  - 10.3368/jhr.43.2.413
DP  - 2008 Mar 31
TA  - Journal of Human Resources
PG  - 413--436
VI  - 43
IP  - 2
4099  - http://jhr.uwpress.org/content/43/2/413.short
4100  - http://jhr.uwpress.org/content/43/2/413.full
SO  - J Hum Resour2008 Mar 31; 43
AB  - OLS may understate the effect of unemployment on crime because of the endogeneity problem (Raphael and Winter-Ember 2001). In this paper, we use changes in the real exchange rate, state manufacturing sector percentages, and state union membership rates as novel instrumental variables to carry out 2SLS estimations. We find a one-percentage-point increase in unemployment would increase property crime by 1.8 percent under the OLS method, but that the elasticity goes up to 4 percent under 2SLS. The larger 2SLS effect has significant policy implications because it explains 30 percent of the property crime change during the 1990s.