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What drives crime, Unemployment or Inequality?
In this paper, I assess the relationship between unemployment, inequality, and crime in the United States. I leverage two distinct shocks to the US labour market over the past decades, which resulted in exogenous variations in unemployment and inequality. These shocks arose from trade competition and technological advancements leading to the routinization of tasks. To conduct this analysis, I employ two well-known Shift-Share (Bartik) Instrumental Variable applications.
The findings reveal that trade competition does not significantly impact arrest rates in local US labour markets. Conversely, the adoption of technology and the subsequent routinization of tasks have a notable positive effect on arrest rates.
I delve into how the effects of routinization differ based on arrested characteristics and types of crimes committed. The rise in arrest rates due to routinization primarily involves adult men, the group most affected by routinization. Moreover, the types of crime affected by routinization predominantly include violent crimes and gambling. These results point to inequality as the main mechanism driving the relationship between routinization and arrests
This sheds light on the relatively understudied increase in US crime during the 1980s, coinciding with the expansion of routinization. It underscores how routinization may be a pivotal driver behind the rise in crime in the US, leading to unintended consequences for societal well-being through the inequality channel. Consequently, policymakers should consider these findings when formulating policies related to income inequality and the protection of workers impacted by technological changes.
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Did low-skilled men crowd low-skilled women out of the UK labor market?
The development of information and communications technologies (ICT) has been proven to have polarized employment opportunities across the skill spectrum in the last decades. It created incentives to substitute capital for labour performing routine tasks making these redundant, while it triggered a rise in the relative demand for workers who perform high-skilled non-routine tasks, and (indirectly) those performing low-skilled non-routine tasks. These effects have been heterogeneous by gender when looking at occupational groups. Meanwhile, it has been observed that female participation decreased in low-skilled occupations. In a recent paper, these two trends have been linked in the US labour market. Low-skilled men, employed in blue-collar occupations, once unemployed, switched to interpersonal occupations, crowding out of the US labour market some low-skilled women, occupied in interpersonal occupations. This paper aims to assess this phenomenon in the UK by analyzing changes in the UK local labour markets and transitions in the overall UK economy.