Economic Adversity and Crime: Old Theories and New Evidence

Academic OneFile

Weatherburn, Don, and Kevin T. Schnepel. "Economic adversity and crime: old theories and new evidence." Australian Journal of Social Issues 50.1 (2015): 89+. Academic OneFile. Web. 3 Feb. 2016.

Economic adversity and crime: old theories and new evidence

Don Weatherburn and Kevin T. Schnepel

Australian Journal of Social Issues. 50.1 (Autumn 2015): p89.

Copyright: COPYRIGHT 2015 Australian Council of Social Service

Abstract:

In this article we make a case for the continuing relevance of economic adversity and social policy in the understanding and prevention of crime. We begin by discussing early theories positing a causal relationship between economic adversity and crime and examine the factors that have led to a loss of confidence in these theories. We then summarise two prominent strands of research investigating important indirect criminogenic effects of economic adversity. The first deals with the long-term impact of economic adversity on parenting. The second analyses the impact of economic adversity on crime through its effect on informal social controls within a community. Finally, we review recent empirical studies that use modern econometric techniques to explore the direct effects of economic adversity on crime, highlighting research focused on factors such as wages, employment, housing, and income support programs. The paper concludes by suggesting a number of areas for future research.

Keywords: economic adversity, crime, unemployment, parenting, informal social control, panel analysis

Full Text:

Introduction

Despite the salience of crime as a social issue, only eight articles about crime have been published by the Australian Journal of Social Issues (AJSI) in the past ten years. While crime rates have declined since the early 2000s in Australia, public concern about crime remains strong (Snowball & Jones 2006). Scholarly interest in crime control has also increased among academics internationally, especially within the fields of sociology, criminology, psychology and economics. In recent years there has been a resurgence of interest in the relationship between socio-economic disadvantages and crime. In this article, we review some of the classic theories and recent evidence in this area with the intention of encouraging more research in Australia that addresses the effects of work, education, housing stability, and financial security--all of which are heavily influenced by economic and social policy--on crime prevention and control.

A strong correlation between measures of local socio-economic disadvantage and rates of criminal activity inspired early criminologists to develop theoretical explanations that focus on disadvantage as a key determinant of criminal behaviour. Figures 1 and 2 below illustrate the relationship with data drawn from New South Wales. The first figure plots the level of socio-economic disadvantage--as measured by the Socio-Economic Indexes for Areas (SEIFA) in each Local Government Area (LGA) of NSW (ABS 2011)--against the log of the recorded violent crime rate for that LGA. The second figure plots the level of disadvantage against the log of the recorded property crime rate. (2) The relationship between crime and disadvantage is clearly very strong for both categories of offence, as indicated by the correlation coefficients (r). Similar patterns have been noted in other countries over a long period of time. (3)

However, perhaps due to the difficulty of isolating a causal relationship empirically, and to an increased emphasis on theories of criminal behaviour originating from the developmental psychology discipline, attention among criminologists towards these socio-economic explanations has waned over the past thirty years. Despite this paradigm shift, the emergence of detailed data that track criminal behaviour and socio-economic factors within narrowly defined neighbourhoods, along with studies designed to estimate causal effects, has led to a burst of empirical research documenting a robust relationship between socio-economic disadvantage and criminal behaviour. We primarily focus our review on the relationship between economic adversity and crime. Increasing economic adversity can be characterised by rising unemployment, declines in stable job opportunities, falling wages and household income, as well as many other factors such as the lack of stable housing and changes in social welfare program participation.

We believe that renewed focus on economic adversity within criminology is likely as researchers discuss and analyse increasing economic inequality and the consequences of this trend with regard to social issues such as crime. There also exists growing concern about the intergenerational transmission of inequality and the degree to which parental economic disadvantage can have permanent effects on the health and human capital of future generations. It is likely that economic adversity not only impacts current criminal activity but also that of future generations.

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In Section 2 of the paper we discuss early theories within criminology, sociology, and economics that posit a direct relationship between economic adversity and crime. Then, in Section 3, we acknowledge a transition away from these classic theories due to lack of sufficient evidence supporting theoretical predictions up until the 1990s. Sections 4 and 5 discuss two theories indirectly linking economic adversity and crime: the effect of adversity on parenting and child development; and the influence of informal social control. In Section 6, we describe new evidence supporting the classic theories of a direct connection between economic adversity and crime. Finally, in Section 7, we propose suggestions for future research.

Classic theoretical perspectives, 1950-1970

There is no generally accepted term for theories that attribute crime to socio-economic disadvantage. For want of a better description, we place such theories under the umbrella term classical paradigm.

Cohen (1955) was one of the first to try and explain the connection between economic adversity and crime. He argued that lower-class socialisation equips lower-class boys less adequately than their middle-class counterparts for success in school. The result, according to Cohen, is a sense of personal failure reinforced by stigmatisation at the hands of teachers and more successful students. Cloward and Ohlin (1960) reached the same conclusion, but argued that delinquency emerges as an act of rebellion against blocked social opportunities rather than as a result of inadequate socialisation. According to Cloward and Ohlin, structural blockages of social opportunity have the effect of driving youths into gangs as a way to gain social status that is unobtainable for them in conventional society.

Strain theory represents a third approach to the problem. Merton (1968) argued that all societies define certain material goals as 'worth striving for' and specify certain norms that define the legitimate means available to achieve these goals. Those who suffer socio-economic disadvantage are said to experience a disjunction between their socially inculcated aspirations and the legitimate means available to achieve them. In other words, they share the same desire as everyone else for wealth and social status, but their position in society limits the scope for achieving these goals through institutionalised or legal systems. According to strain theory, this disjunction or conflict increases the likelihood of an individual to participate in crime.

Sociology was not the only discipline in the 1960s to claim a link between disadvantage and crime. The influential economist Gary Becker (1968) proposed a theory of offending according to which individuals allocate their time between legitimate and illegitimate activities in proportions that maximise total expected utility. The expected utility of crime in his theory is determined by the perceived risks, costs and benefits associated with it. The costs of crime include opportunity costs, that is, benefits foregone as a result of involvement in crime. Becker argued that the opportunity costs of involvement in crime rise with increases in income and education. His theory thus implies a strong positive relationship between disadvantage and crime.

A 'consensus of doubt', 1970-1990

The belief that crime had its origins in social and economic inequality dominated criminological thinking throughout the 1960s. By the late 1970s, however, confidence in these theories had begun to fade. The first seeds of doubt were sown when researchers using self-reported surveys found no evidence of a relationship between economic adversity and crime (Hirschi 1969). This led some to question the supposed relationship between socio-economic status and crime (Tittle, Villemez & Smith 1978). (4)

Another notable factor was the failure of the United States War on Poverty to reduce crime (Wilson 1987). The War on Poverty pursued by Presidents Kennedy and Johnson included civil rights reform and expanded eligibility for income transfer programs; increased aid to families with dependent children; and the introduction of new or expanded programs such as Medicaid and food stamps, compensatory job training and compensatory schooling. American expenditure on such programs nearly doubled between 1950 and 1980 (Wilson 1987). None of this resulted in a reduction in crime. On the contrary, between 1960 and 1975, the United States experienced substantial increases in robbery (+264 per cent), aggravated assault (+164 per cent), rape (+174 per cent), homicide (+188 per cent) and burglary (+200 per cent) (Cohen & Felson 1979).

By the end of the 1980s cross-sectional studies gave way to time-series studies and it became clear that, although crime rates are uniformly higher in areas of high unemployment, crime rates are not consistently higher during periods of high unemployment (Chiricos 1989). Indeed, crime rates were sometimes found to be higher during periods of low unemployment. Although most of the research in this area focused on the United States, the findings were replicated in other countries. Weatherburn, Lind and Ku (2001), for example, examined the relationship between unemployment and crime in Australia between January 1989 and December 1995, a period that overlapped with a recession widely believed to be the worst in Australia since the Great Depression. They too found no relationship between unemployment and crime.

The advent of large-scale longitudinal birth cohort studies dealt yet another blow to classical theory. In 1986, the US Panel on Research on Criminal Careers published a highly influential report that raised doubts about the value of cross-sectional research and argued that longitudinal studies were much better geared towards determining the causes of offending behaviour (Blumstein, Cohen, Roth & Visher 1986). This declaration placed a question mark over studies linking crime to poverty, unemployment or economic inequality since most of them employed cross-sectional designs. Meanwhile, longitudinal studies were beginning to emerge highlighting the importance of family factors (for example, poor parental supervision; lack of parent--child involvement; erratic, harsh and inconsistent discipline) as causes of involvement in crime (Loeber & Stouthamer-Loeber 1986).

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Cantor & Land (1985) and Land and colleagues (1995) endeavoured to resolve these results by arguing that unemployment has competing effects on offender motivation and criminal opportunity. According to their theory, high unemployment leads to more motivated offenders but fewer unguarded houses during the day and fewer people going out at night. These two effects, it was argued, tend to cancel each other out. Cantor and Land's methods came under considerable criticism (Greenberg 2001; Paternoster & Bushway 2001). As a result, their theory did little to remove what Chiricos (1989) termed the 'consensus of doubt' surrounding the relationship between unemployment and crime. By the end of the 1980s, some influential theorists (for example, Wilson & Herrnstein 1985; Gottfredson & Hirschi 1990) were openly dismissive of the idea that rates of participation in crime were influenced by factors such as income, poverty and unemployment.

Economic adversity and parenting quality

These developments signalled a marked shift in criminological interest from the economic and social to the individual and family factors in the genesis of offending. During the 1990s, the number of published longitudinal studies grew rapidly, so much so that by 2002 it became possible to speak of a developmental paradigm in criminology (Farrington 2003). The key features of this paradigm were an overarching concern with the way in which different factors at different stages of an individual's life course affect an individual's 'offending trajectory.' Particular emphasis was placed on distinguishing the role of psychological--particularly family--factors from macro-social factors in the genesis and maintenance of offending.

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Ironically, as criminologists were losing interest in the influence of economic and social factors on human behaviour, researchers in the field of child welfare were becoming increasingly interested in the way economic and social factors influenced the quality of parenting that children received (Belsky 1993).

Lempers, Clark-Lempers and Simons (1989), for instance, examined the effects of a rural economic recession in a mid-western rural community in the United States. The subjects in the study were 622 students enrolled in schools throughout the community. To measure economic stress, students were interviewed about recent income-related changes in their family's lifestyle. Measures of parental nurturance and consistency in administering discipline were obtained through a questionnaire dealing with changes in parental behaviour during the previous six months, as perceived by the students. Lempers and colleagues (1989) found a strong negative association between the perceived level of financial hardship experienced by the family over the last six months and the perceived level of parental nurturance. They also found a strong relationship between the perceived level of financial hardship and the use of inconsistent discipline by the parents.

Harris and Marmer (1996) examined the impact of economic stress on the emotional and behavioural involvement of parents with their adolescent children using data from the National Survey of Children (NSC), a panel study of a nationally representative sample of children interviewed in three waves: 1976, 1981 and 1987. They found a strong effect of chronic economic stress (whether measured by household income or welfare receipt) on the level of emotional and behavioural involvement between fathers and their adolescent children. They also found that mothers on welfare were less likely to be behaviourally involved with their children. Both of these effects were obtained in the presence of controls for race, gender, age, parental education and maternal education.

These findings and others like them (for example, Elder, Van Nguyen & Caspi 1985; McLoyd & Wilson 1990; Silbereisen, Walper & Albrecht 1990) suggested that economic adversity might influence juvenile involvement in crime by disrupting the parenting process. A theory along these lines is discussed in Delinquent-Prone Communities (Weatherburn & Lind 2001). The argument in the book was that parents who experience higher levels of economic or social stress are more likely to neglect or abuse their children or engage in disciplinary practices that are considered harsh, erratic or inconsistent. This pattern of parenting behaviour increases the likelihood that children will gravitate towards or affiliate more strongly with their peers. To the extent that these peers are involved in crime, this association increases the likelihood that susceptible juveniles will become involved in crime.