Understanding the Time Path of Crime

Abstract

This paper examines the recent drop in crime and the reasons given therefore, and concludes that to properly evaluate this phenomenon one must sort out the long-term trends in crime over the last 50 years from the short-term fluctuations around those trends. There have been two clear long-run trends in crime over the last half century: one involving sharply rising crime until the late 1970s, followed by a period of slow decline over the next two decades. As one might expect, there have been considerable short-term fluctuations around the two long-run trends, and indeed, the later period has experienced greater variability in crime around the long-term declining trend than had been the case during the initial period of the rising secular trend in crime. Section I of the paper documents these broad patterns -- murder rates rose by roughly 4.4 percent per year from the mid-1950s through the mid-1970s, and have fallen by roughly six-tenths of 1 percent since then -- and discusses how they illuminate the issues of why crime has fallen and where it is likely to be headed in the future. Section II builds upon this discussion to show that increased levels of incarceration and favorable demographic shifts contributed to the slow decline in crime over the last two decades, but cannot explain the sudden drop in crime in the mid-1990s after the abrupt increases in crime of the late 1980s. Section III concludes by noting that the growing cost of incarceration suggests that at some point, the public will call for an end to further increases in the number of prison inmates. Since increasing incarceration, more police, and favorable demographics have been modestly offsetting the influences pushing towards higher crime, when the increases stop and the demographic trends turn unfriendly (as they now have), crime will begin a slow secular rise for the first time in two decades, unless some other force (better policing strategies, effective social programs) controls crime or the unknown long-term criminogenic forces in society (the breakdown in the family, pernicious media influences, declining schools, growing drug use and drug markets?) abate.