Crime and Labor Market: A panel data analysis

Abstract

This study empirically investigates the causal relationship between crime and labor market. Panel regression analysis with time period 2012- 2014 along with pool OLS method has been used for this purpose. The countries under study are divided into three categories: high, moderate and low crime index. The variables used in this study are also of three kinds: socio economic, demographic and deterrence variables. The results indicate that in high crime index countries (UDCs) unemployment & urbanization have significant positive impact on crime index whereas inflation, GDP growth rate, prison population rate and participation of youth 18-24 years in education and training are insignificant. In moderate crime index countries (UDCs) GDP growth rate & urbanization have significant negative impact on crime index. Whereas inflation, unemployment, prison population rate and participation of youth 18-24 years in education and training are insignificant.  In low crime index countries, the same socioeconomic and demographic factors as are noticed in high crime index countries i.e. unemployment and urbanization in addition to prison population rate are found to be responsible for labor market crimes. In order to control labor market crimes, the study recommends the improvement in GDP growth rate, discouraging the trend of urbanization, enhancement in education and training programs so that unemployment level be controlled and hence labor market can be saved from crimes.