Unemployment and crime: New evidence for an old question

This paper uses panel data techniques to examine the relationship between unemployment and a range of categories of crime in New Zealand. The data set covers sixteen regions over the period 1984 to 1996. Random and fixed effects models are estimated to investigate the possibility of a causal relationship between unemployment and crime. Hypothesis tests show that two-way fixed effects models should be used. The regression results provide some evidence for significant effects of unemployment on crime, both for total crime and for some subcategories of crime.