The story of Bonnie Elizabeth Parker and Clyde Chestnut Barrow robbing and murdering their way around America in the early 1930s captured the attention of the press at the time of their pursuits. The legend of their criminal lives was later solidified when their tale was made into a 1967 film starring Hollywood A-listers Warren Beatty and Faye Dunaway. Yet for all the focus on killing policemen and holding up banks, the context of their actions is often missed: this was the era of the Great Depression.
Parker’s mother was widowed when Parker was four years of age, and Barrow’s family had been so poor that they slept under a wagon for several months, so neither came from money. They met in Dallas, Texas, in 1930, in the aftermath of the Wall Street Crash, a crisis that began when turmoil struck the New York Stock Exchange on 24 October 1929 and culminated five days later on ‘Black Tuesday.’ It fired the starting gun on a severe global economic downturn that would last for a decade and be marked by bank failures, unemployment, home repossessions, and poverty.
The Great Depression was the worst thing to hit the American people since the Civil War of the 1860s, and its effects spread around the world. Across the United States, crime rose, from theft and robbery to murder. To those who were suffering, Bonnie and Clyde’s story even inspired some sympathy. To economists, their actions were merely emblematic of a wider situation. Economic crises often coincide with rising crime, in part because unemployment directly affects criminality.
Joblessness and crime
A 2016 study published in the Journal of Economic Studies drew on data from 1965 to 2006 to show that as unemployment rises, crime rates also rise. The authors found that the effects of unemployment could persist beyond the economic event, influencing crime even after the recession had passed. Other studies suggest that unemployment may increase only certain forms of crime, including property theft, the theft of valuables, and robbery, while some types of violent crime may decline.
A research team from France and the UK examined mechanisms linking higher unemployment and economic pressure to changes in crime rates. Their analysis centred on two theories. The first is the ‘criminal motivation effect.’ This is based on risk and reward. When a person loses a job, offences such as robbery or theft may become more economically attractive because of the financial gain they offer and the basic needs they will meet. The second theory is the ‘opportunity effect.’ Crime requires a motivated offender and an available target, but during economic crises, the number of targets may fall, leading to a fall in crime.
The study, published in the Journal of Economic Behaviour and Organisation in 2021, drew on data from France from 1975 to 2013, and from the UK from 1983 to 2018. The researchers also analysed data from 24 other countries from 1998 to 2016. They concluded that higher joblessness increases non-violent crime, so a stable economic environment is important for stabilising non-violent crime.
Risk and reward
Someone living through a period of severe economic strain may not be able to earn enough money to ensure a decent standard of living, or even meet their basic needs. Under such circumstances, breaking the law can be more tempting. They weigh the gains from an offence (such as theft or robbery) against its costs (being caught and punished). When lawful alternatives are no longer enough, the equation changes and the potential benefit of the crime begins to carry greater weight, hence the phrase ‘the economics of crime’.
Broadly, this approach treats crime and other unlawful acts as choices that may appear rational when individuals weigh prospective rewards against risks such as arrest and punishment. Gary Becker, an American prize-winning economist, laid the foundations for the 'economics of crime' in a 1968 paper. It became known as 'Becker's rational choice theory' and was used to design more effective law enforcement approaches.
Becker did not suggest that poverty turns people into criminals. He focused on the relationship between law enforcement effectiveness and the relative attractiveness of incentives such as theft under severe economic conditions. As the probability of arrest and the severity of punishment increase, crime becomes less attractive, but when wages fall, criminal activity becomes more appealing.
