Crime and Labour Market Opportunities in Italy (1993–2002)

Abstract. This paper investigates the relationship between labour market conditions and crime in Italy accounting for both age and gender in the unemployment measure and considering regional disparities between the North‐Centre and the South of Italy. Using regional data over the period 1993–2002, we study the impact of wages and unemployment on different types of crime. To mitigate omitted variables bias, we control extensively for demographic and socio‐economic variables. Empirical results suggest that unemployment has a large and positive effect on crime rates in southern regions. Our results are robust to model specification, endogeneity, changes in the classification of crimes, and finally, to alternative definitions of unemployment.