Panel Paper: Your Friends and Neighbors: Localized Economic Development, Inequality, and Criminal Activity

Thursday, November 8, 2012 : 1:35 PM
Preston (Sheraton Baltimore City Center Hotel)

*Names in bold indicate Presenter

Emily Owens and Matthew Freedman, Cornell University

We exploit the large but temporary increase in demand for low-wage workers generated by the 2005 Base Realignment and Closure (BRAC) program in San Antonio, Texas to identify the effects of changes in economic conditions on local crime. Taking advantage of variation in BRAC’s impact over time and across neighborhoods, we use a difference-in-difference methodology to estimate how an exogenous shock to demand for low-wage workers affects criminality. We find that while improvements in economic conditions have no robust impact on violent behavior, appropriative criminal behavior increases in neighborhoods where some residents experienced increases in earnings.

Full Paper: