History of the United States
The Great Depression

What was the crime rate during the Great Depression?

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February 28, 2012 10:36PM

The Great Depression of the 1930s led to dire

circumstances for a large share of American households.

Contemporaries worried that a number of these households would

commit property crimes in their efforts to survive the hard times.

The Roosevelt administration suggested that their unprecedented and

massive relief efforts struck at the roots of crime by providing

subsistence income to needy families. After constructing a panel

data set for 83 large American cities for the years 1930 through

1940, we estimated the impact of relief spending by all levels of

government on crime rates. The analysis suggests that relief

spending during the 1930s lowered property crime in a statistically

and economically significant way. A lower bound ordinary least

squares estimate suggests that a 10 percent increase in per capital

relief spending during the Great Depression lowered property crime

rates by close to 1 percent. After controlling for potential

endogeneity using an instrumental variables approach, the estimates

suggest that a 10 percent increase in per capital relief spending

lowered crime rates by roughly 5.6 to 10 percent at the margin.

More generally, our results indicate that social insurance, which

tends to be understudied in economic analyses of crime, should be

more explicitly and more carefully incorporated into the analysis

of temporal and spatial variations in criminal activity.

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