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Working Paper

What Accounts For the Decline in Crime?

In this paper we analyze recent trends in aggregate property crime rates in the United States. We propose a dynamic equilibrium model which guides our quantitative investigation of the major determinants of observed patterns of crime. Our main findings can be summarized as follows. First, the model is capable of reproducing the drop in crime between 1980 and 1996. Second, the most important factors that account for the observed decline in property crime are the higher apprehension probability, the stronger economy, and the aging of the population. Third, the effect of unemployment on crime is negligible. Fourth, increased earnings inequality prevented an even larger decline in crime. Overall, our analysis can account for the behavior of the time series of property crime rates over the past quarter century.

Working Papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment on research in progress. They may not have been subject to the formal editorial review accorded official Federal Reserve Bank of Cleveland publications. The views expressed in this paper are those of the authors and do not represent the views of the Federal Reserve Bank of Cleveland or the Federal Reserve System.


Suggested Citation

Imrohoroglu, Ayse, Antonio Merlo, and Peter Rupert. 2000. “What Accounts For the Decline in Crime?” Federal Reserve Bank of Cleveland, Working Paper No. 00-08. https://doi.org/10.26509/frbc-wp-200008