Working Paper: CEPR ID: DP10415
Authors: Brian Bell; Anna Bindler; Stephen Machin
Abstract: Recessions lead to short-term job loss, lower levels of happiness and decreasing income levels. There is growing evidence that workers who first join the labour market during economic downturns suffer from poor job matches that have a sustained detrimental effect on their wages and career progression. This paper uses a range of US and UK data to document a more disturbing long-run effect of recessions: young people who leave school in the midst of recessions are significantly more likely to lead a life of crime than those entering a buoyant labour market. Thus crime scars from higher entry level unemployment rates are both long lasting and substantial.
Keywords: crime; recessions; unemployment
JEL Codes: J64; K62
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Entry-level unemployment during recessions (J64) | increased likelihood of engaging in criminal activities (K42) |
| Higher unemployment rates at time of labor market entry (J64) | accumulation of criminal human capital (K42) |
| Higher unemployment rates at time of labor market entry (J64) | depreciation of legal human capital (J24) |
| Initial unemployment (J64) | future criminal behavior (K42) |
| Recessions (E32) | shaping criminal careers (K14) |