Monday 12
A8 - Illegal behavior, Corruption & Crime
Chair: Rafael Ribas
› 11:05 - 11:30 (25min)
› Room 103 - B. Martinu
Spatial Nexus in Crime and Unemployment in Times of Crisis
Eirini Tatsi  1@  , Povilas Lastauskas  2@  
1 : Stockholm University  (SOFI)  -  Website
2 : Bank of Lithuania

Space is important. In this paper we use the global financial crisis as an exogenous shock
to the German labor market to elucidate the spatial nexus between crime and unemployment.
Our contribution is twofold: first, we lay down a parsimonious spatial labor market model with
search frictions, criminal opportunities, and, unlike earlier analyses, productivity shocks which
link criminal engagement and employment status. Second, we seek empirical support using
data on the 402 German regions and years 2009 − 2010, in a setting that not only allows for
crime spatial multipliers but also circumvents reverse causality by exploiting exogenous changes
in unemployment due to the crisis. As predicted by our theory, the destruction of the lowest
productivity matches, measured by increases in unemployment rates, has a significant impact on
pure property crime (housing burglary and theft of/from motor vehicles) and street crime. The
analysis offers important implications for local government policy.



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