Local labour markets and theft: New evidence from Canada

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Résumé (français)

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Résumé (anglais)

This paper provides causal evidence that labour market opportunities affect theft-related crime rates in Canada. Synthetic panel data from 2007-2011 combine the Labour Force Survey and Uniform Crime Reports microdata. Low-skill unemployment rates and corresponding crime rates are measured for age-city-specific groups of young males. IV estimates exploit the exposure of low-skill employment to exogenous demand for exports to the US. Causal estimates of the elasticity of theft-related crimes with respect to low-skill unemployment range from 0.357 to 0.654. The use of aggregated unemployment rates appears to bias OLS estimates downward. IV estimates are found to mitigate this aggregation bias.