Income Inequality and Crime: A Review and Explanation of the Time–series Evidence (October 2013)

Author: Hector Gutierrez Rufrancos, Madeleine Power, Kate E Pickett and Richard Wilkinson.

Theoretical arguments and empirical evidence largely suggest that there is a link between high income inequality and high crime rates;  the evidence, however, mainly comes from cross-sectional data – data of many subjects (people, countries etc.) collected at one point in time. This paper addresses this lack evidence by analysing whether the link between income inequality and crime is confirmed by time-series data – data collected at numerous points over a period of time.

A review of 17 papers on crime and changes in income inequality provides clear evidence that there is a strong relationship between rising income inequality and increasing property crime. There is, however, a considerably less clear relationship between changes in income inequality and violent crime such as homicide and robbery. While North American and international analyses suggests that there is a link, the European data is inconclusive.

It is possible that the mixed results are due to different levels of reporting for different types of crime. For instance, homicide, robbery and murder, for which full coverage reporting is higher, have been shown to be sensitive to changes in income inequality, while the reported data on other violent crimes seems to vary in ways unrelated to income inequality. A main finding of this paper, therefore, is that different types of criminal activity need to be considered separately.

Read the paper.