Economic Indicators and Crime

“Criminologists have long known that unemployment rates don’t correlate well with rates of violent crime,” writes Steven Pinker in his book The Better Angels of Our Nature. Despite what feels like it must be true, that national unemployment rates influence crime, there is not a correlation between rising unemployment and rising crime. We all have ideas about what causes crime, and for many of us unemployment is an explanation, but it turns out crime is much more complex and doesn’t fall in line with many of our economic indicators.
Pinker continues, “In the three years after the financial meltdown of 2008, which caused the worst economic downturn since the Great Depression, the American homicide rate fell by another 14 percent.” Every time I read this statistic I am surprised. It is hard to believe that when unemployment gets worse people do not resort to more crime. I imagine that many of us would expect more crime as desperate people try to get money and resources through illicit means when jobs are not available to provide those things for them. But that is not what has happened recently. Until 2020 crime was falling, going through the economic downturn of the early 2000s and the subsequent rise and record low unemployment of the late 2010s.
It also turns out that inequality isn’t much better at predicting crime. Regarding inequality Pinker writes, “the problem with invoking inequality to explain changes in violence is that while it correlates with violence across states and countries, it does not correlate with violence over time within a state or country.” Like unemployment, I would expect that more unequal societies would have more crime, as those at the bottom fight among themselves and are unhappy with the wealth and opulence they see in the lives of others. However, inequality was at a low point in the 1960s in the United States, when crime was  much worse across the United States. In the last couple of decades inequality has worsened in the US, but with the exception of the slight increase in crime since 2020, crime trends have gone downward. The global differences we see in crime rates, Joseph Henrich would argue in The WEIRDest People in the World, are probably better explained by factors other than a single measure of inequality.
The crime waves that have occurred since the end of WWII and our explanations for those crime waves are an interesting example of how quickly we can jump to inaccurate conclusions about the world. Humans make causal observations and connections in the world around them, but sometimes those causal links are invalid. While I do believe we have the ability to use math, statistics, causal observations, and experiments to be able to deduce and understand root causes, the process is difficult. Crime is an example of how far off our causal reasoning can be from reality. Explaining social phenomena is difficult, and even the best theories rarely seem to be able to explain more than 40% of the variance we see in a given phenomenon. We can do lots of studies of crime and start to get a better understanding, but simply assuming that a couple of economic indicators will explain crime is an inadequate way to think about trends and phenomena.

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