Crime, deterrence and unemployment in Greece: A panel data approach

This study empirically examines the relationship among crime, deterrence and unemployment in Greece. A regional dataset over the period 1991–1998 was collected and analysed. Our econometric methodology follows the Generalized Method of Moments (GMM) estimator applied to dynamic models of panel data. The results show that property crimes are significantly deterred by higher clear-up rates and that unemployment increases crime. For violent crimes, however, the effect of the clear-up rate and unemployment are found to be generally insignificant. Finally, our results may provide support to policy makers in forecasting criminal activity in the current economic downturn under a wave of harsh austerity measures, budget cuts and increased unemployment.

► We examine the relationship among crime, deterrence and unemployment in Greece.
► The clear-up rate is found to be associated with property crime only.
► Unemployment increases property crime, but female unemployment decreases rape.
► Property crime is expected to increase in 2011 as a consequence of the current economic environment.