Crime Across Borders - Spatial Contagion and Unemployment Spillovers : The case of Swedish municipalities

Sammanfattning

Property crime is a persistent social issue causing substantial financial losses and undermining community safety. When unemployment rises, individuals lose access to legal income streams, lowering the opportunity cost of offending and increasing the motivation to commit property crime. This paper examines whether property crime exhibits spatial contagion across Swedish municipalities and whether cross-border unemployment spillovers drive this effect. With data gathered from the Swedish National Council for Crime Prevention and Statistics Sweden for 290 municipalities in 2019 and 2023, cross-sectional Spatial Durbin Models and a first-difference Spatial Autoregressive model are estimated. By examining both local unemployment effects and spatial spillovers across municipal borders, the aim is to contribute to the fields of regional economics and criminology. The results show that local unemployment significantly raises local property crime in both years, confirming the opportunity cost mechanism of criminal behavior. Property crime exhibits significant spatial contagion during the recession period, with municipalities surrounded by high-crime neighbors experiencing higher crime rates themselves, suggesting that economic downturns intensify offender mobility across borders. Unemployment in neighboring municipalities does not robustly spill over into local crime in any specification. This null result is attributed to Sweden's regionally integrated labor markets, which prevent spatial concentration of unemployment, and to the welfare state buffering the immediate criminogenic impact of job loss.