CARES and crime

In: Journal of economic studies, Volume 50, Issue 1, p. 37-48

Abstract

PurposeThe US signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020 to alleviate the harsh economic effects of the pandemic and related shutdowns. A substantial part of the bill expanded and increased unemployment insurance payments, where a growing area of research estimates strong anti-poverty effects. The authors examine the effect of these policies on crime.Design/methodology/approachThe authors use new event study and difference-in-differences techniques to estimate the effect of increasing unemployment insurance payments on property crime and violent crime. Then, the authors estimate the effect of expanded unemployment qualification programs on crime. The authors use a rich set of controls including unemployment, contemporaneous policies and mobile device tracking data to estimate the degree to which people stayed at home.FindingsThey find that increasing unemployment insurance payments decreased crime by 20%, driven by a 24% decrease in property crime. The authors also find suggestive evidence that expanding unemployment qualifications decreases crime.Practical implicationsThe authors find a new and substantial benefit of expanded unemployment insurance beyond their antipoverty effects.Originality/valueTo the authors' knowledge, this is the first study that directly examines the impact of the CARES Act on crime.