Unemployment and property crime: evidence from Croatia

This paper studies the effect of unemployment on property crime in Croatia. The workhorse model of economics of crime is estimated on yearly panel data at the county level over the period 1998-2016. The results show that unemployment has a significant and positive effect on burglaries. The estimated elasticity is higher for female unemployment. The main effect of unemployment comes from lower crime quantiles for female unemployment, and from higher crime quantiles for male unemployment. The police force has the strongest negative effect on crime in areas with the highest crime rates. The typical identifying variation in unemployment is used to interpret the economic significance of the estimated effect. For a typical increase in unemployment, the number of burglaries is estimated to increase by 3.3 percent, which translates to over 750,000 euros in reported damages.