Youth unemployment and murder crimes in KwaZulu-Natal, South Africa

The relationship between crime and unemployment has a long history in social science and remains a central point of debate for politicians today. In this paper, the objective is to establish whether youth unemployment has a causal effect on murder cases in KwaZulu-Natal; a province in South Africa facing high levels of both and the contribution is methodological. In particular, this paper pioneers the application of a control function procedure in testing and controlling idiosyncratic endogeneity within a count data framework in a bid to isolate the exogenous effect of youth unemployment on murder crimes. Using local municipality-level panel data observed between 2006 and 2017 and holding constant standard control variables, youth unemployment is found to be exogenous to omitted time-varying correlates suggesting that classical count data models with entity-fixed effects suffice. Also confirmed is that the control function approach reports results that are similar to the classical Poisson estimator while the Negative Binomial alternative tends to underestimate the effect of youth unemployment on crime by about 10%. Consistent with the majority of studies in literature, the analysis finds a positive and sizeable effect of youth unemployment on murder offences. A percentage point increase in youth unemployment increases the odds of murder occurrence by 1.6-1.8 times. This suggests that South Africa's labour market could be linked to murder crimes in KwaZulu-Natal and that a social policy aimed at creating jobs for young people can be an alternative way of combating murder crimes in the province.