Austerity, welfare cuts and hate crime: Evidence from the UK's age of austerity

From 2010 the UK entered an ‘age of austerity’, with major cuts to welfare payments. We study the link between these cuts and increases in hate crimes. Using a panel of 313 Community Safety Partnerships areas in England and Wales, we show that for each £100 loss per working age adult, racially or religiously motivated crimes rose by approximately 5-6% in 2013/14 and 2014/15. These effects are large given a mean loss of £450 per working age adult and survive multiple robustness checks. Using individual data, we find no evidence that these crimes are driven by increased anger of the benefit recipients per se but find evidence for a decline in community cohesion.