The Labor Market and Female Crime

The same forces that lead to changes in participation in the labor market can also affect the extent of criminal activity. To analyze such interaction we construct a search-theoretic model where labor market participation, labor market outcomes and crime are determined jointly. The model is calibrated to US data focusing on females. The main finding is that changes affecting the labor market, such as changes in productivity or in preferences toward market activities, can have significant effects on criminal behavior. ∗We thank Marco Cozzi, Dale Mortensen, Victor Rios-Rull and Randall Wright for their comments. We also thank the seminar participants at the Federal Reserve Bank of Cleveland and at the universities of Texas, Iowa, Pennsylvania, Santa Barbara and Western Ontario. The views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Cleveland or the Federal Reserve System.