Neighborhood Crime and Young Males' Job Opportunity

Abstract

A puzzling aspect of America's crime problem is the concentration of crime in poor, inner-city neighborhoods. The economic model of crime suggests that this concentration may be caused by a dearth of legitimate earnings opportunities for young males living in these neighborhoods. While studies on spatial mismatch in the low-skilled labor market have documented the relatively poor job opportunity possessed by youth in these neighborhoods, there exists no evidence on the role job opportunity plays in explaining the dramatic spatial variation in crime within urban areas. Using a unique panel of neighborhood crime and employment data for Atlanta, I estimate models that control for time and fixed effects, as well as the possible endogeneity of job opportunity. The results suggest that young males' job opportunity plays a key role in resolving the enigma surrounding the high variation in crime across urban neighborhoods.