Job Displacement and Crime

We use a detailed employer-employee data set matched with detailed crime information (timing of crime, fines, convictions, crime type) to estimate the impact of job loss on an individual's probability to commit crime. We focus on job losses due to displacement, i.e. job losses in firms losing a substantial share of their workers, for workers with at least three years of tenure. Displaced workers are more likely to commit offenses leading to conviction (probation, prison terms) for property crimes and for alcohol-related traffic violations in the two years following displacement. We find no evidence that displaced workers' propensity to commit crime is higher than non-displaced workers before the displacement event; but it is significantly higher afterwards. Displacement impacts crime over and above what is explained by earnings losses and weeks of unemployment following displacement.