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See Inside March 2009

Will the Recession Spark a Crime Wave?

The bad economy doesn't necessarily mean we're headed for Armageddon, argue some researchers. But maybe they've been looking at the wrong data

The robberies were a fitting end to a terrible year. On the Monday after Christmas, thieves in New York City held up five different banks in just over six hours, the near-final entries in the city’s 444 bank robbery cases in 2008—a 54 percent increase over 2007. “It makes me think that the recession is making people go to extreme measures,” one bystander told the New York Times, summing up the commonly held viewpoint that as the economy contracts, crime will swell to fill the void. And what a contraction we face: “People fear that we’re headed for Armageddon,” remarks David Kennedy, director of the Crime Prevention Center at the John Jay College of Criminal Justice.

But Kennedy and other researchers think that unemployment and financial desperation are not so inexorably linked to theft and murder. The factors that influence crime rates are far more varied and complex than any economic indicator.

Take, for example, the Great Depression. In the years after the stock market crash of 1929, crime plummeted as well. “People sitting in their houses don’t make great targets for crime,” says Bruce Weinberg, an economist at Ohio State University. “People going out spending cash and hanging out in big crowds do.” That was especially true in the Roaring Twenties, a time that also suffered from Prohibition and its attendant crime syndicates.

American cities have gone through two other major crime epidemics in the last century—one in the late 1960s into the early 1970s and another at the tail end of the 1980s into the early 1990s, when the nationwide murder rate hit an all-time high. The first happened at a boom time; the second struck during a recession. But in both cases, the primary underlying cause was a spike in the drug trade—heroin in the 1970s, crack cocaine in the 1990s.

Even though these “outside shocks to the system,” as Kennedy calls them, play a strong role in determining crime rates, recent research has teased out some links between the overall economy and crime. When Weinberg and his collaborators Eric D. Gould of Hebrew University and David Mustard of the University of Georgia examined young males with no more than a high school education—the demographic group that commits the most crime—they found that average wages and unemployment rates were directly linked to the incidence of property crimes. (Here property crimes refer to felonies such as burglary, auto theft and robbery, the last of which is ordinarily classified as a violent crime because of the implied use or threat of force.) Hard times also lead to more domestic abuse.

Murder rates have never linked very well to the unemployment rate or other standard economic indicators, but Rick Rosenfeld, a criminologist at the University of Missouri–St. Louis, thinks that is because those statistics do not tell the full story. “When we’re trying to understand criminal behavior, we’re trying to understand the behavior of people,” he says, “so it’s preferable to use subjective indicators as well as objective indicators.” He and Robert Fornango of Arizona State University traced murder rates against the Consumer Sentiment Index—a survey of how people view their current financial situation and how hopeful they are about the future. They found that lower index scores strongly correlate with higher murder rates.

“I don’t think that newly unemployed people become criminals,” Rosenfeld notes, but “marginal consumers—the shopper who goes to discount stores—many of those consumers turn to street markets during an economic downturn. These are often markets for used goods, but some are stolen goods. As demand increases, incentives for criminals to commit crimes expand.” And on the black market, any dispute between buyer and seller that would ordinarily be handled by the Better Business Bureau might now be settled with violence. The Consumer Sentiment Index reached a 28-year low last November.

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