	Introduction

The United States is recovering from a broad recession that is considered the longest-lasting economic downturn since World War II. Various indicators of economic strength, such as the unemployment rate and foreclosures, reached their worst showings in decades during the recession and the following months. The current state of the economy has continued to spark debate concerning whether economic factors can affect crime. This report examines the relationships between selected variables of economic strength and crime. It then reviews the existing literature in the field analyzing various data sets that examine whether the unemployment rate and foreclosures can be related to increases in the national crime rate. Further, conclusions drawn about the relationship between national crime rates and economic variables may not be able to be generalized to the relationship between the economy and crime in all states and localities around the country. Specifically, during the most recent economic downturn, many referred to the unemployment rate and the proportion of home foreclosures as proxies for economic health. Overview of the Literature

A number of studies analyzing the relationship between unemployment and crime rates tend to find small statistically significant correlations between unemployment and the property crime rate but not between unemployment and the violent crime rate. For one, the effects of the unemployment rate on the property crime rate may better explain property crime trends during some time periods than during others. The lack of conclusive evidence for a strong, or even significant, correlation between the two suggests that the unemployment rate may have an indirect relationship with the property crime rate. A number of studies have shown a relationship between physical signs of disorder in a neighborhood and increasing crime. Property crime rates did not appear to be as closely linked to foreclosures as were violent crime rates. Another study identified by CRS from the 1990s examined the relationship between foreclosures and crime—specifically, the impact of crime on foreclosures rather than the impact of foreclosures on crime. Other Economic Indicators

While much research on the relationship between economic variables and crime rates has focused on macroeconomic variables such as unemployment and home foreclosures, some research suggests that other economic variables could fluctuate more strongly with crime rates and could thus serve as better proxies for evaluating the relationship between the economy and crime. These results suggest that crime rates—the property crime rate, in particular—may be linked to the economy, but that researchers may not see the relationship by studying traditional macroeconomic factors such as unemployment. It does not appear that recessions—as measured by macroeconomic variables such as the unemployment rate or home foreclosures—can be definitively linked to increases in crime rates. As mentioned earlier, the CRS review did find limited evidence of some correlation between crime and microeconomic indicators such as consumer sentiment. Number of Law Enforcement Officers and Crime Rates

If crime rates do in fact increase during times of economic decline or instability (something that the literature and data are inconclusive about), policy makers may be interested in what measures can be taken to address such increases in specific localities that may be related to the economic decline.
The United States is currently recovering from a broad recession that is considered the longest-lasting economic downturn since World War II. Various indicators of economic strength, such as the unemployment rate and foreclosures, reached their worst showings in decades during the recession and the following months. The state of the economy has generated debate concerning whether economic factors can affect crime. This report examines research on how selected economic variables may or may not be related to crime rates.
There are multiple macroeconomic indicators, such as the consumer price index or real earnings, that can serve as estimates of economic strength. Specifically, during the most recent economic downturn, many referred to the unemployment rate and the proportion of home foreclosures as proxies for economic health. Therefore, most of the discussion in this report utilizes unemployment and foreclosure data in discussing the relationship between the economy and crime.
A number of studies have analyzed the link between the unemployment rate and crime rates (with a greater focus on property crime), some theorizing that in times of economic turmoil, people may turn to illicit rather than licit means of income. However, a review by CRS found a lack of consensus concerning whether the unemployment rate has any correlation with the property crime rate. A number of studies analyzed by CRS that did find a correlation between the unemployment rate and the property crime rate generally examined time periods during which the unemployment and property crime rates moved in tandem. Conversely, some studies that used longer time-horizons tended to find no direct link between the unemployment rate and the property crime rate.
The link between foreclosures and crime rates has not been reviewed as comprehensively by social scientists as other broader macroeconomic variables—namely, unemployment. Most of the literature in the field focuses on whether abandoned houses can be linked to increases in crime rather than looking at the particular role that foreclosures may play. The literature reviewed suggests that there is some correlation between abandoned houses and the property crime rate (but not, however, the violent crime rate). With respect to the relationship between foreclosures and crime rates, some of the studies found that foreclosures did have an impact on the violent crime rate (but not the property crime rate). However, the limited number of studies examining the relationship between foreclosure rates and crime rates complicates any attempt to draw firm conclusions.
While much research on the relationship between economic variables and crime rates has focused on macroeconomic variables such as unemployment and home foreclosures, some research suggests that other economic variables, such as gross domestic product (GDP) or gross state product (GSP), as well as consumer sentiment, could fluctuate more closely with crime rates and could thus serve as better proxies for evaluating the relationship between the economy and crime.
Policy makers continue to be concerned with potential impacts—such as increased crime—that the economic climate may have on the nation. As a result, some have suggested that focus should be placed on increasing the resources of state and local police departments (i.e., increasing the number of police officers). In addressing this concern, however, Congress may opt to consider whether economic downturns can be linked to crime rates.