Unemployment Insurance Generosity and Crime

Previous studies show that unemployment has a positive effect on crime rates; however, unemployment insurance (UI) benefits could mitigate these effects. Using county-level unemployment and crime data and taking advantage of the UI law changes across states and over time (1990-2016), we provide new evidence that the UI benefits act as a buffer against local labor market shocks. A one-standard-deviation increase in benefits is associated with 2.4% and 1.9% lower property and violent crime rates for a county at average unemployment