Crime and Unemployment in Turbulent Times

We use the exceptional variation in municipality-level unemployment in Sweden during the 1990s to identify the effect of unemployment on crime. Our findings are as follows: (i) There is a statistically and economically significant effect of general unemployment on the incidence of burglary, auto theft, and drug possession; (ii) we find no evidence for the popular view that youth unemployment matters for crime; (iii) prime-aged unemployment is robustly correlated with main categories of youthful crimes, a finding consistent with the idea that unstable life conditions of parents have adverse spillover effects on the life-choices of their children.