Young adult job loss and criminal activity

This paper uses data from the Panel Study of Income Dynamics to study the relationship between job displacement and the probability of arrest and incarceration among young adults. Results show that displacement is associated with increases in the probability of arrest and incarceration. The increase in arrest probabilities is associated with crimes related to robbery and alcohol and traffic violations. Access to financial resources from the government to cope with earnings losses associated with displacement does not mitigate the effect of job loss on the probability of arrest. Finally, we find that the increased probability of arrest is concentrated among male and non-white job losers. Results are robust to different sample selection criteria.