Unemployment and crime in India: does economic activity matter?

Using nationally representative district-level data from India for 2014–2019, we examine how economic activity and unemployment jointly influence crime rates. Whilst greater economic activity can reduce crime rates by lowering unemployment and providing more economic opportunities, greater economic activity can increase crime rates by widening social and economic disparities. We examine how these economic forces interplay and jointly influence crime rates by considering two specific types of crimes, namely crimes against women and property crimes. We find that economic activity and youth unemployment positively impact crime rates; however, their joint effect is negative, showing that the marginal impact of unemployment on crime rates reduces when economic activity increases. Our results are robust to endogeneity biases and alternative measures of unemployment and economic activity. This study offers important policy insights for developing countries like India, where crime and youth unemployment are growing. Policies should aim to create more skilled jobs, provide support, formalize markets, reinforce guardianship, and include targeted efforts to address gender-based violence, especially where economic activity alone does not sufficiently reduce crimes.