Economic Downturns and Crime

The United States is currently recovering from a broad recession that is considered the longest-lasting economic downturn since World War II. Various indicators of economic strength, such as the unemployment rate and foreclosures, reached their worst showings in decades during the recession and the following months. The current state of the economy has continued to spark debate concerning whether economic factors can affect crime. This report examines the available research on how selected economic variables may or may not be related to crime rates. There are multiple macroeconomic indicators, such as the consumer price index or real earnings, that can serve as estimates of economic strength. Specifically, during the most recent economic downturn, many referred to the unemployment rate and the proportion of home foreclosures as proxies for economic health. Therefore, most of the discussion in this report utilizes unemployment and foreclosure data in discussing the relationship between the economy and crime. A number of studies have analyzed the link between the unemployment rate and crime rates (with a greater focus on property crime), some theorizing that in times of economic turmoil, people may turn to illicit rather than licit means of income. However, a review by CRS found a lack of consensus concerning whether the unemployment rate has any correlation with the property crime rate. A number of studies analyzed by CRS that did find a correlation between the unemployment rate and the property crime rate generally examined time periods during which the unemployment and property crime rates moved in tandem. Conversely, some studies that used longer time-horizons tended to find no direct link between the unemployment rate and the property crime rate. The link between foreclosures and crime rates has not been reviewed as comprehensively by social scientists as other broader macroeconomic variables—namely, unemployment. Most of the literature in the field focuses on whether abandoned houses can be linked to increases in crime rather than looking at the particular role that foreclosures may play. The literature reviewed suggests that there is some correlation between abandoned houses and the property crime rate (but not, however, the violent crime rate). With respect to the relationship between foreclosures and crime rates, some of the studies found that foreclosures did have an impact on the violent crime rate (but not the property crime rate). However, the limited number of studies examining the relationship between foreclosure rates and crime rates complicates any attempt …