Graduation Year

2017

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Nayana Bose

Reader 2

Kerry Odell

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© 2016 Jiahui M. Zeng

Abstract

Analyzing crimes through the scope of economics, this thesis explores the correlation between unemployment rate and crime rate, and other possible causes of surging crimes in China by using a fixed-effect regression model. Using provincial level panel data from 2000 to 2010, we did not find significant correlation between arrest rate and prosecution rate to unemployment rate. We found evidence that the Chinese government might intentionally controlled the unemployment rate at an artificially low and stable rate. Additionally, the set of ‘stern punishment’ campaigns during the 2008 Beijing Olympic games, causing a huge increase in arrest rate and police expenditure, could distort the overall trend of crime and unemployment. Moreover, we find a significant positive correlation between GDP per capita level, rural-urban income inequality and floating population to crime. Therefore, we recommend that the Chinese government should create social safety net that targets specifically at rural migrant workers. Not only that, reform and increase job opportunities in rural area is also urgent to close the income gap in rural and urban areas.

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