Canadian Journal of Sociology The Canadian Journal of Sociology / Cahiers Canadiens de Sociologie

The Influence of Economic Factors and Social Control Policy on Crime Rate Changes in
Canada, 1962-1988
Author(s): Bernard Schissel
Source: The Canadian Journal of Sociology / Cahiers canadiens de sociologie, Vol. 17, No. 4
(Autumn, 1992), pp. 405-428
Published by: Canadian Journal of Sociology
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The influence of economic factors and
social control policy on crime rate changes

in Canada, 1962-1988*
Bernard Schissel
Abstract. This research investigates the impact that macro-economic conditions and social control
policies have on changes in crime and imprisonment rates for the period 1962 to 1988 in Canada.
Informed by the theories of political economy, I contend that in the context of debilitating economic
conditions, government policy becomes enmeshed in law and order and welfare strategies that stress
greater policing, greater incarceration, and the increased use of placative forms of control. Based on
time-series auto-correlation analysis, the results generally support the hypotheses that both coercive
and placative forms of control and fiscal distress occasion greater rates of crime and imprisonment.
The analysis illustrates that such social indicator models of crime rates vary according to the nature
and seriousness of the crime.
Resume. Cette recherche examine les effets des conditions macro-economiques et des politiques
de controle social sur les changements dans les taux de crimes et d'emprisonnements pour la periode
allant de 1962 a 1988 au Canada. Informe par les theories de l'6conomie politique, je pretends que,
dans le contexte de conditions economiques d6bilitantes, la politique gouvemementale s'empetre
dans la loi et l'ordre et les strategies du bien-etre social qui insistent sur davantage de maintien de
l'ordre, davantage d'incarc6rations et l'utilisation de plus en plus grande de formes apaisantes de
contr6le. En se basant sur l'analyse de l'autocorrelation d'une serie de temps, les resultats
soutiennent gen6ralement les hypotheses selon lesquelles les formes de controle a la fois coercives
et apaisantes et la d6tresse fiscale occasionnent des taux de crimes et d'emprisonnements plus eleves.
L'analyse illustre que de tels modeles d'un indicateur social du taux de crimes varient selon la nature
et la gravit6 du crime.
* I would like to thank Peter Li, David Forde, Les Samuelson, three anonymous reviewers, and the
CJS editor for their helpful comments and criticisms of this paper. An earlier version of the paper
was presented at the Canadian Sociology and Anthropology Association annual meeting in
Kingston, Ontario, 1991. Please address all correspondence and offprint requests to Professor
Bernard Schissel, Department of Sociology, University of Saskatchewan, Saskatoon, Saskatch-
ewan, S7N 0W0.
Canadian Journal of Sociology/Cahiers canadiens de sociologie 17(4) 1992 405
Introduction
A growing body of research is attempting to address the social and economic
nature of crime by studying the linkages between crime and imprisonment rates
and socio-economic conditions. In Canada, the debate has centred on the
structural versus cultural determinants of crime commission. Hagan (1989)
argues that the difference in homicide rates between Canada and the United
States is reflective of different cultural values. Lenton (1989) criticizes the
consensus approach taken by Hagan by arguing for a more structural approach
which incorporates the conflict conceptions of structural poverty and racial
composition. Kennedy, Forde, and Silverman (1989) have extended the debate
by suggesting the inclusion of regional variation in homicide rates and the need
to address types of homicide - crime-based versus interpersonal/familial.
While the arguments are well-founded and compelling, the relationship between
economic conditions, social control policy, and crime rates remains elusive. The
basic dilemma involves two central issues: (1) do crime rate changes reflect
actual crime committed, and can they be causally related to socio-economic
conditions as explanatory variables? (2) do increases in crime and punishment
rates reflect not an increase in crime committed but rather an increase in social
control policies directed at the perceived "crime epidemic"?
In this paper, I take the latter perspective. Crime rate changes and changes in
imprisonment rates are associated with macro-economic conditions, but the
causal relationship is mediated by the state which intervenes to deter criminal
behaviour or to placate a potentially volatile population. Like Lenton (1989), I
challenge the more traditional theories of criminal behaviour, especially those
that argue that crime rates reflect either greater disposition or greater opportunity
to commit crimes as a result of economic conditions. The linkage between crime/
imprisonment rates and economy, I argue, is due primarily to the reaction of law
enforcers to economic conditions; the underlying assumption here is that while
official crime and imprisonment rate changes may respond partly to the amount
of crime committed, crime and imprisonment rates are largely determined by the
resources that the state levels at social control (Mandel, 1991; Box, 1987).
One of the primary mechanisms through which social control policy gets
translated into crime rates is policing. The magnitude and nature of policing is
largely a function of policing resources (staff and technical resources), of
political initiatives against a perceived burgeoning crime rate (Bayley, 1985),
and of policing practices (Silverman, 1980). Bayley suggests, for example, that
"the character of government and police are virtually indistinguishable... the
maintenance of social control is fundamentally a political question. Not only
does it powerfully shape what a society may become, but it is a matter in which
governments feel a vital stake, for they know that their own existence depends
upon it" (1985: 189).
406
Koenig (1991) has made an empirical attempt to unpack the relationship
between police and crime rates using times series analysis of Canadian crime
data. His research suggests that when socio-economic influences are controlled,
increases in police strength are associated with succeeding increases in most
types of crime rates, with the exception of violent crimes. His conclusion that
violent crimes are an exception to the pattern suggests that policing, as a
mechanism of social control, is effectively directed at crimes of economy, such
as theft and robbery, and not as much at crimes of violence. This paper, as a result,
takes account of the nature of crime in the investigation of social policy and its
relationship to crime rates.
Using time series analysis of changes in Canadian crime and imprisonment
rates occasioned by economic distress and state policies to offset that distress, I
build a composite model of social control which is based on a political economy
explanation of increasing crime and imprisonment rates. From this perspective,
the state functions to protect the social relations of production; threats to
production by "social marginals" are countered through expanding social
control strategies (Cohen, 1985; Scull, 1984; Spitzer, 1975).
Economic distress and crime

While the mechanisms by which economic distress leads to criminal involve-
ment or arrest are hotly debated, there is general agreement that higher crime
rates are more likely in times of economic distress. The strain theories, in general,
contend that the reduced opportunities for gainful employment in economic
downturns precipitate criminal activity - explained at the individual or aggre-
gate level (Farnworth and Leiber, 1989; Agnew, 1985). Criminal opportunity
theorists argue that increases in work and leisure activities outside the household
are associated with increases in crime rates, the logic being that the potential for
victimization increases as people appear outside the home. High unemployment
rates, for example, encourage routine activities around the home and lessen the
likelihood of criminal victimization (Cantor and Land, 1985; Jackson, 1984;
Cohen and Felson, 1979). For such consensus models, actual rates of criminal
activity fluctuate depending on economic conditions, and the methodological
assumption is that crime rates reflect actual crime committed.
Political economy theorists, on the other hand, argue that heightened rates of
official crime and imprisonment are the result of increased interventionist
activities by the state in an attempt to remove members of the underclass from
the labour market. Scull (1984), for example, has suggested that the decarceration
movement has resulted from the state's attempts to divest itself of costly penal
policies. Furthermore, decarceration has ironically resulted in an overall net-
widening of the crime control system where more people are processed, the
existing corrections institutions remain full (or overcrowded), and community
alternatives to incarceration have proliferated. My research tests the hypothesis
407
that more people are caught and processed during times of fiscal crisis (as a result
of state policy in reaction to fiscal crises); decarceration is more illusory than real
as a fiscal policy (Cohen, 1985; Scull, 1984). Accordingly, official rates of crime
and attendant rates of imprisonment greatly exaggerate actual increases in
criminal activity (Lessan, 1991; Mandel, 1991; Box, 1987).
Unemployment
Regarding unemployment, I contend that the consensus theorists' models of the
unemployment-crime nexus are too simplistic. As Box and Hale (1986) argue,
orthodox approaches are invalidated by equivocal research and by the use of
official rates of crime which vary according to the willingness of the police to
process offenders, the willingness of the public to report crimes, and the
selectivity that occurs in the justice system. More appropriately, then, for this
research, unemployment is proposed as a macro-level condition that precipitates
increased social control activity. That the police and the judiciary are more likely
to pursue arrest, conviction, and imprisonment during times of high unemploy-
ment has little to do with whether unemployment causes crime, but depends
rather on whether social control agents perceive this to be the case (Hale, 1989;
Box and Hale, 1986). For imprisonment, similar arguments can be made.
Marginal peoples are presumed to be more volatile and disruptive during fiscal
crises. In the state's attempts to legitimate its activities and to control "problem
populations" (Spitzer, 1975), it uses imprisonment as a convenient and politi-
cally popular method of dealing with the marginalized (Hale, 1989; Box, 1987).
Because increased imprisonment contradicts fiscal integrity, the state is con-
fronted with aproblem of legitimacy. Scull (1984) has suggested that decarceration
has solved the problem of state legitimacy by maintaining or increasing levels of
social control while appeasing those who advocate fiscal restraint.
Inflation
Inflation presents a similar problem for the state. Devine, Sheley, and Smith
(1988) maintain that inflation promotes anomie and raises a population's
motivation to commit crime. The authors add, however, that like unemployment,
inflation limits the state's financial ability to engage in social control, and that
the inflation rate helps shape penal and correctional policies. The latter argument
is consistent with the orientation of this paper; however, I propose that inflation
does not limit but rather encourages social control. I argue, in the vein of Lessan
(1991) and Laffargue and Goderfory (1989) that deteriorating macro-economic
conditions, indicated by both unemployment and inflation, shape penal policy by
demanding increased state social control efforts. The dual indication of unem-
ployment and inflation as measures of economic crisis is consistent with
econometric literature that maintains that employment and inflation are related
but conceptually distinct (Long and Witte, 1981).
408
Social control policy
The arguments surrounding connections between social control policy and the
state reflect the dual nature of social control. First, the state attempts, reactively,
to deter crime by punishing or incapacitating those who violate its laws. Research
suggests that increased resources devoted to the punishment of crime will result
in lower crime rates through deterrence and incapacitation (Devine, Sheley, and
Smith, 1988; Cantor and Land, 1985). Second, in times of economic crisis, the
state acts to pre-empt supposed threats posed by troublesome classes through
relief spending (Colvin and Pauly, 1983; Piven and Cloward, 1971); the state
also acts to remove members of the underclass - perceived as threats to the
economy -from the labour market through increased policing, conviction, and
incarceration (Box and Hale, 1986; Wallace, 1981).
In the vein of Devine, Sheley, and Smith (1988) and Lessan (1991), I
hypothesize that crime rates reflect both reactive control policy (through
deterrence and incapacitation) and placative control (through relief directed at
pacifying a potentially threatening population). In addition, I argue that the
effects of relief and crime control strategies are not expressed immediately; the
effects of these policies are manifest primarily in subsequent years (Devine,
Sheley, and Smith, 1988).
Empirical model
The models for this research are informed by current longitudinal work in crime
and public policy (Koenig, 1991; Land, McCall, and Cohen, 1990; Devine,
Sheley, and Smith, 1988; Box and Hale, 1986; Melossi, 1985). The analysis is
guided by econometric time series causal modelling techniques (Ostrom, 1990;
Judge et al., 1985) which permit the evaluation of longitudinal data using
regression analysis. Using Canadian data for the years 1962 to 1989, the models
test the influences that macro-economic conditions and social control policy
have on rates of homicide, theft, and robbery: theft as a typical economic crime;
robbery as an economic crime involving actual or threatened violence; and
homicide as a crime generally motivated by other than economic need (although
not exclusively so where murder accompanies robbery). As well, the analysis
examines the reciprocal effects of crime rates and social control policy by
estimating equations that predict the change in the size of the prison population.2
1. DeFronzo (1983) has suggested that aid to impoverished Americans is inversely related to crime
rates, especially violent crime and burglary. DeFronzo, however, has analyzed the contempora-
neous effects of welfare using cross-sectional data and has failed to account for the potential
longitudinal effect of welfare on crime rates.
2. Devine, Sheley, and Smith (1988) have used two-stage least squares to test the reciprocal effects
of social indicator models. I have chosen to estimate the reciprocal effects of the crime on state
control (indicated by the size of the prison population) using separate prediction models because
of the theoretical and substantive importance of the causal model of imprisonment to theories of
crime and control (Box and Hale, 1986).
409
This prison population model is not only important for analyzing non-recursivity,
but also for its theoretical and substantive contributions to an understanding of
the causal nature of imprisonment.
Economic conditions are indicated by the rate of inflation and the male
unemployment rate. The male unemployment rate has been used in previous
research both as an indicator of economic conditions and an indicator of
population criminal potential given that the crimes of importance are crimes
typically committed by males. The task in this research is to determine how
unemployment is causally related to crime and imprisonment rates. To this end,
unemployment is entered in the models both as a contemporaneous and a
subsequent effect. Spending on relief is used to operationalize pre-emptive
social control policy. The size of the police force and the prison population are
used to operationalize reactive state social control policy. Finally, the size of the
male population (age 15-29 yrs) is included in the model as a control variable -
Figure 1A. Hypothesized model of macroeconomic conditions and state control policy
on crime rates.
Crime rate
(homicide, robbery, theft
+ Infl
Unemployment
rate Inflation \ Relief
e Prison population
rate
Macroeconomic conditions Social control policy
Figure 1B. Hypothesized model of macroeconomic conditions, crime rate,

control policy on prison population rates.
Prison population rate
\
A \
+/
Unemployment
rate Inflation Relief
Police force
Overall crime rate
size
Macroeconomic conditions Crime rate Social control policy
410
age and sex are both strong correlates of crime in Canada (Hartnagel, 1987), and
current research using macro-indicator models of crime rates has included an
indicator of criminal potential based on age and sex (Devine, Sheley, and Smith,
1988; Chiricos, 1987).
The model of the influences of economy and social control policy on crime
rates is depicted in Figure 1A. Figure 1B presents the model predicting the
change in the size of the prison population. The independent variables are
depicted as direct influences on crime and imprisonment rates. The signs
corresponding to each causal path indicate whether the hypothesized relation-
ship is direct or inverse.
Independent variables
Unemployment rate
Whether the crime rate is theorized to result from the strain of blocked
opportunity (Agnew, 1985), or from the increased criminal opportunity during
times of high unemployment (Cohen and Land, 1987), the general theme in the
consensus literature is that the level of unemployment is directly related to levels
of crime. In this research, I take the perspective of Box and Hale (1986) that the
relationship between unemployment and crime rates is not mechanistically
causal. A more complete explanation includes the intensified and selective
nature of state crime control during economic crises (Spitzer, 1975). From this
perspective, the relationship between unemployment and crime should hold not
only for economic crimes, but also for crimes of violence.
To test my hypothesis, I use unemployment rate as one of the indicators of
fiscal crisis in Canada at each time period, assuming it to have a future positive
influence on both economic and violent crime rates and on imprisonment rates;
the hypothesized causal mechanism is increased social control legislated in
response to the moral panics resulting from economic crises. An immediate
unemployment effect is included to assess the degree to which blocked oppor-
tunity or criminal opportunity affects the crime rate. This effect should be more
apparent for crimes of economy although the criminal opportunity theorists
argue that most types of victimization including homicide increase with in-
creases in unemployment. Unlike previous research in this area which has used
only the immediate effect of unemployment, I argue that the lagged effect
captures the extent to which the state control policy responds to the potential
threat posed by an unemployed and consequently volatile population, and that
the immediate effect captures the extent to which economic privation or criminal
opportunity encourages people to commit criminal acts.
Inflation
Current critical literature suggests that, similar to the relationship between

unemployment rate and crime rate, an increase in inflation (as indicated by the
411
consumer price index) will have a positive influence on crime and imprisonment
rates - again increases in state control of problem peoples results partly from
the perceived volatility of people during fiscal distress (Spitzer, 1975). For this
research, the rate of inflation and the unemployment rate are used to indicate the
degree of fiscal distress. As mentioned previously, his dual indication is
consistent with econometric literature (Long and Witte, 1981).
Size of the police force

Police force size is proposed as adirect indicator of reactive crime control policy.
Based on the increased ability of a larger police force to detect crime, I
hypothesize a positive relationship between the size of the police force and crime
rates, and a similar association between the police force and imprisonment rates.
The latter is based on different reasoning, however, in that policing and
punishment of crime are both reactive crime control strategies which increase
as a reaction to economic crisis. With the exception of Land and Felson (1976),
most of the currentresearch in this area has used prison rates alone to operationalize
reactive state policy (Devine, Sheley, and Smith, 1988; Cohen and Land, 1987).
From a revised theoretical perspective, a dual indication of reactive policy is
required to tap the enhanced crime control strategies that occur at the policing
and the judicial levels.
Size of the prison population

I have used the prison population rate to assess the incapacitating and deterrent
effects of crime control. The conventional hypothesis is that imprisonment
deters future criminal behaviour (Zedlewski, 1983) and prevents recidivist
offenders from re-offending. More consistent with the theoretical orientation of
this paper is the position that, despite whether prison deters, the judiciary
believes that harsher prison sentences are warranted during periods of prolonged
economic crisis (Hale, 1989; Box and Hale, 1986). Further, I test the possible
reciprocal nature of the relationship between crime and imprisonment rates by
a model in which the change in prison population is posed as the dependent
variable, and crime rates, among other economic and control variables, are the
predictor variables (see Fig 1B).
Spending on relief
The persistent theme in the critical literature is that spending on relief is aimed
at quieting a potentially volatile population and that pre-emptive control is used
more often by the state during economic crises (Colvin and Pauly, 1983; Piven
and Cloward, 1971). With the exception of DeFronzo (1983), little research has
been devoted to the question of the effects of welfare on crime rates. Consistent
with the critical literature, I posit a negative relationship between welfare
spending and crime and imprisonment rates. For this research, placative control
412
activity is operationalized by total spending on health and welfare by the state (in
deflated 1980 dollars).
Control variable
Size of the male population
Crimes in Canada and in other jurisdictions are committed primarily by rela-
tively young males (Hartnagel, 1987). The current longitudinal research using
social indicator models has consistently included the proportionate size of the
young male population as a control variable (Devine, Sheley, and Smith, 1988;
Cohen and Land, 1987; Box and Hale, 1986). Based on this literature, I
hypothesize a positive relationship between the size of the young male popula-
tion (ages 15-29) and crime and imprisonment rates.
Data and measurement

I have used longitudinal data to test the hypothesized models. The analysis
covers the years 1962-1988 in Canada. The data are taken from Statistics Canada
and the Canadian Centre for Justice Statistics Uniform Crime Reports (UCR),
and cover the ten provinces and the Yukon and the Northwest Territories. The
crime rates are based on "actual offences" committed by all individuals in
Canada, and are gathered by the UCR survey from police records. Actual
offences are those that are reported to the police and are deemed to be founded.
Imprisonment rates are derived from corrections data compiled by the Canadian
Centre for Justice Statistics and are based on the total number of federal and
provincial inmates in Canada. It is important to note at this time that both crime
and imprisonment rates are based on crime detected and are not necessarily
indicators of crime committed. I argue, rather, that these data are partly indicative
of the nature and extent of social control and justice.
All variables are expressed as first-differences or change scores (ratey - ratey l)
First-differencing helps eliminate autocorrelation (the sequential influence of
values in one year on a subsequent year) for a specific variable. Autocorrelation
is assessed in each model using the Durbin-Watson statistic and the Savin-White
table of upper and lower bounds (Johnston, 1984). For this analysis, the time-
series is relatively short (N=25) and small samples present problems for
maximum-likelihood estimates. Johnston (1984) cautions in favour of the use of
more stringent significance levels than usual for short time-series models, and,
as a result, in this analysis the Durbin-Watson statistics are assessed on the basis
of a .01 significance level and three levels of significance are presented for the
regression parameter estimates.
The causal specification of the model is tested by estimating the equations
using independent variables whose first-difference values have been lagged one
year (t-1). This procedure permits the examination of influences of changes in
policy and economy in one year on changes in crime rates in the following year.
413
Two variables, the size of the police force and the size of the male population are
left unlagged because these variables are hypothesized to influence crime rates
immediately rather than in a subsequent year. Both a lagged and unlagged
unemployment variable are entered into each model: the unlagged term is used
to test the contemporaneous influence of unemployment on the crime rate, if
unemployment produces or inhibits criminal activity; the lagged term is used to
test whether the state increases social control in response to economic distress
manifested in higher crime rates in future years.
The necessity of distinguishing the simultaneous and future influences of
unemployment on crime rates is often addressed in the literature based on
varying theoretical arguments (Box and Hale, 1986). Thomberry and Christenson
(1984) argue for the inclusion of both an instantaneous and a lagged effect of
unemployment in the same model although their position remains rather unpopu-
lar; the inclusion of both influences in a time series analysis has never been
addressed adequately since the work of Thorberry and Christenson (1984).
Methodological problems of multicollinearity arise, however, when both unem-
ployment influences are included in the same model. In response, I argue that the
small zero-order relationship between the lagged and unlagged unemployment
variables (Tables 1A and 1B) reduces the possibility that multicollinearity is a
problem in this analysis. Furthermore, the process of first-differencing is
intended to eliminate problems of autocorrelation and multicollinearity. In
conclusion, I contend that the immediate and lagged unemployment influences
are analytically, as well as theoretically, distinct.
As part of the analysis of autocorrelation, I have produced a series of graphs
which assesses the difference between original values and first-difference values
for all the variables in the analysis.3 The graphs also illustrate the historical
trends in the variables comprising the models and are available from the author
upon request.
Most noticeable in all of the graphs are the dramatic fluctuations that occurred
during the 1980-1982 economic recession in Canada. Theft and robbery rates
peaked in 1980 and then decreased steadily. The homicide rate was relatively low
in 1980 and increased significantly in 1981, after which time it levelled off. The
3. The graphs for homicide, robbery, and theft show quite clearly how the trends that are evident
with original values are removed by using change scores. This series of graphs may be obtained
from the author upon request.
In most cases, the distributions for change scores show mean values that are consistent over
time. If one looks at the graphs of the male population and the consumer price index, it can be
seen that the first difference graphs do not show equal variances from year to year. A log-
transformation corrects for this. Based on the work of Devine, Sheley, and Smith (1988), the
change scores in the original models were logged to meet the regression assumption of equal
variances. The models based on logged variables, however, are similar to the first-difference
models and I have chosen, as a result, to use the unlogged models as appropriate for regression
analysis.
414
prison population rates, however, did not show parallel historical trends. Inter-
estingly, prison population rates increased dramatically in 1981 and 1982, the
time in which crime rates decreased. The possibility that the synchronicity
between high imprisonment and low crime rates may result from incapacitation
and deterrence is tested in this research.
The period between 1980 and 1982 is interesting in regard to the other
variables in the model, as well. The inflation rate peaked in 1980 and the
unemployment rate rose substantially between 1981 and 1982, evidence of an
economic recession. What is interesting, however, is the increase in the prison
population and the spending on relief that occurred during this economic crisis.
As the economy declined, more people were imprisoned and more money was
spent on welfare. It may be that imprisonmentrates follow high crime rates which
follow economic crises - this trend was somewhat apparent in 1975 as well.
Spending on relief may be the result of greater need during periods of economic
decline. An alternative explanation may be that imprisonment is the reactive
form and welfare is the pre-emptive form of social control that the state
increasingly uses in bad times. These explanations are to be tested in the
forthcoming models.
Models
Each model is estimated with three sets of equations using first-difference
values. The first equation uses independent variables which have been lagged
one year. The lagged terms permit estimations based on influences upon crime
and imprisonment rates that are manifest in the following year. Such
estimations maintain the causal order of the influences that is established
by the theoretical model, and eliminate the possibility of reciprocal effects.
Although non-recursive models of crime, economy, and control have been
estimated (Devine, Sheley, and Smith, 1988; Thorberry and Christenson,
1984), I maintain that the lagged independent variables effectively capture the
longitudinal influences that are being hypothesized.
In addition to the above, autocorrelation (resulting from the influence of a
value in one year on a value in the following year) may be tested and accounted
for by the inclusion of a variable that controls for the previous year's crime or
imprisonment rate. The reasoning is that increases or decreases in crime or
imprisonment rates may have an autonomous influence on rates for the following
year. Consequently, the models are re-estimated with the inclusion of a lagged
dependent term (lag dependent t-1). The zero-order correlation coefficients for
all variables are presented in Tables 1A and lB. The coefficients are used to
support model selection and to assess issues of multicollinearity.
Results
The regression analysis for the influences of macro-economic policy and social
control policy on homicide rates for Canada for the years 1963 to 1988 is
415
Table 1A. Zero-order correlations among changes in crime rates and predictor variables,
and lagged dependent variables.
1 2 3 4 5 6 7 8 9 10 11 12 13
1. Chg. homicide 1.00 -.26 .26 .21 .32 -.03 .24 .45 -.17 -.18 .04
2. Chg. homicide (t-1) 1.00 .24 .27 .37 .30 -.01 .27 .14
3. Chg. robbery 1.00 .33 .71 .11 -.52 .46 .44 -.18 -.50-.30
4. Chg. robbery (t-1) 1.00 .39 .33 .27 .45 .10 .04 -.23
5. Chg. theft 1.00 .49 .24 -.31 .40 .49 -.12 -.46 -.36
6. Chg. theft (t-l) 1.00 .54 .19 .16 .42 .18 -.06 -.26
7. Chg. unemployment 1.00 .29 .04 .29 .40 .37 -.04
8. Chg. unemployment (t-1) 1.00 -.17 .12 .38 .59 .40
9. Chg. police force size 1.00 .58 -.65 -.24 -.07
10. Chg. size of male population 1.00 -.37 -.08 .13
11. Chg. consumer price index (t-1) 1.00 .43 .12
12. Chg. size of prison population (t-1) 1.00 .39

13. Chg. relief 1980 dollars (t-1) 1.00
Table 1B. Zero-order correlations among change in size of priso

independent variables
1 2 3 4 5 6 7 8 9
1. Chg. size of prison popn. 1.00 .17 .38 .59 .20 .15 .21 .47 .15
2. Chg. size of prison popn.(t-l) 1.00 .03 .37 .59 -.13 .08 .44 .40
3. Chg. overall crime rate (t-1) 1.00 .38 .11 .46 .44 .09 -.26
4. Chg. unemployment rate 1.00 .29 .20 .39 .39 -.06
5. Chg. unemployment rate (t-l) 1.00 .04 .29 .34 .41
6. Chg. police force size (t-l) 1.00 .58 -.56 .00
7. Chg. size of male population (t-l) 1.00 -.25 .22
8. Chg. consumer price index (t-1) 1.00 .07
9. Chg. relief 1980 dollars (t-1) 1.00
presented in Table 2. Equation 3 incorporates the lagged depende

while equations 1 and 2 omit this term. Equation 2 contains both
unlagged unemployment term - the unlagged variable captures th
raneous effect of unemployment on crime rates and the lagged ter
future effects of unemployment on crime rates.
In assessing the appropriateness of the proposed models, I sugg
inclusion of the lagged dependent variable does not substantially alte
either in terms of fit (adjusted R2 which is reduced) or effect (non
regression coefficient .115). This finding is corroborated by the sm
correlation coefficient between the homicide dependent variable an
term (Table 1A r=-.26). A comparison of models 1 and 2 illustrat
that the addition of a lagged unemployment term is substantial, bein
at the .01 level and contributing 5 percent to the variance expla
criteria suggest that model 2 is a more complete model than model 1
to fit and effect. Furthermore, the possibility of multicollinearity
416
when one observes the relatively low zero-order correlation between unemploy-
ment and the lagged unemployment variable (r=.29). Finally, with all three
models, the corresponding Durbin-Watson statistic suggests that autocorrelation
is not a problem (from the D-W table of upper and lower bounds at .01
significance).
Based on an assessment of the magnitude and significance of the standardized
slopes, neither the predicted positive influence of the size of the male population
nor the proposed negative influence of the size of the police force is empirically
significant. The relationships between macro-economic conditions and homi-
cide are significant. The influence of unemployment rate is in the hypothesized
direction; an increase in current unemployment is associated with an increase in
homicide (.840), supporting the argument that adverse employment conditions
create the conditions for increased crime. Most notable here, however, is the
influence that the lagged unemployment variable has on homicide. The signifi-
cant negative coefficient (-.343) suggests that higher rates of unemployment in
one year result in lower homicide rates in the following year. Land, McCall, and
Cohen (1990) have found a similar negative correlation between unemployment
and subsequent homicide rates and postulate that unemployment has an effect on
Table 2. Time series models predicting homicide rates in Canada 1963-1988.
First difference homicide

Predetermined variables (1) (2) (3)
Lag dependent (t-1) .115
(.110)
Chg unemployment rate (t-1) -.001*** -.001***
(-.343) (-.353)
Chg. unemployment rate .002*** .003*** .003***
(.606) (.840) (.812)
Chg. consumer price index (t-1) -.013 -.017** -.016**
(-.183) (-.241) (-.225)
Chg. size of prison popn (t-1) -.026*** -.024*** -.025***
(-.463) (-.427) (-.439)
Chg. police force size .001 .006 .004
(.166) (.121) (.092)
Chg. relief 1980 dollars (t-1) .00005*** .00007*** .00007***
(.414) (.622) (.597)
Chg. size of male popn -.040 -.102 -.110
(-.033) (-.083) (-.090)
Adjusted R2 .515 .565 .549
Durbin-Watson 1.81 1.93 2.03
Rho .053 -.008 -.056
Note: All coefficients are maximum

parentheses. Economic variables ar
***P<.Ol(one-tailed); ** P<.05(one
417
routine activity; during times of high unemployment, more activity occurs in or
near the household and less criminal victimization results (especially victimiza-
tion from violent crimes). In turn, lower rates of victimization translate into
lower crime rates. I would argue, however, that because this negative effect
occurs only for the lagged term and not for the immediate unemployment effect,
the lifestyles hypothesis is difficult to defend.
Kennedy, Silverman, and Forde (1991) in their analysis of Canadian homi-
cide statistics have found a similar negative relationship between unemployment
and homicide, and they hypothesize that unemployment does not necessarily
lead to social disorganization or the breakdown in values. Their reasoning is that
the effects of unemployment insurance and other government programs offset
the negative effects of lack of work. Social programs may have a stabilizing or
placating effect on the population and a negative future effect on homicide rates.
This argument is supported by my research.
Furthermore, the association between the inflation rate (t- 1) and homicide is
similar to that of unemployment (t- 1) and homicide. Devine, Sheley, and Smith
(1988) and Box and Hale (1986) have argued that it is difficult to envision
homicide as an act that results in the resolution of personal economic problems
resulting from bad economies. The explanation that accounts for the similarity
in effect for inflation and unemployment, then, is that the state, in its attempt to
control or pacify a perceived potentially disruptive population, increases both
reactive and placative social control efforts in response to economic crises,
especially for crimes of violence. Simply put, these strategies, which are
engendered by inflation and unemployment, prevent increases in homicide.
As for the effects of placative control strategies, the positive significant
coefficient corresponding to the change in relief spending suggests that increases
in welfare spending in one year result in an increase in the homicide rate in the
following year. This unexpected finding contradicts the hypothesis linking
welfare and social control strategies. The result is rather perplexing given the
body of literature which suggests the opposite, although the arguments are
primarily directed at economic crimes. I would argue, similarly, that the
hypothesized negative effect of welfare on crime is most relevant to crimes of
economy, although this does not explain the relatively strong positive associa-
tion between welfare spending and homicide.
With regard to the coercive social control variables, the effect of imprison-
ment on homicide is in the hypothesized direction, supporting the argument with
respect to the incapacitating and inhibitory effect of imprisonment on future
criminal activity (beta -.427). Ironically, the size of the police force, as another
measure of coercive control, is non-significant, given the expectation that
greater policing should result in greater crime detection. In light of this finding,
I reason that increased policing will have little effect on homicide rates and a
greater effect on the more prevalent and less-detected crimes of economy. The
418
presumption is that, despite the size of the police force, most, if not all, homicides
in Canada are detected but not most or all robberies or thefts.
While these results are only partially supportive of the theoretical model, a
move from the violent crime of homicide to the economic crimes of robbery and
theft present models which may more fruitfully tap the proposed relationships
between economy, control, and crime (Land and Felson, 1976; Devine, Sheley,
and Smith, 1988). The estimates of the effects predicting changes in robbery
rates are presented in Table 3. As with the homicide equations, model 2,
including a lagged unemployment term represents the most parsimonious and
most complete model, explaining 63 percent of the variance in robbery rates.
Serial correlation is not a problem (based on Durbin-Watson and rho statistics).
While robbery may be argued to be a violent as well as an economic crime,
the robbery model is somewhat different from that of homicide. Overall, the
three equations reveal the consistent positive influence of the size of the male
population. With regard to the economic variables, the change in the inflation
rate effects a positive change in robbery in the following year, supporting the
argument that fiscal crises may generate not only greater criminal activity, but
also greater crime control activity. For the best-fitting model (model 2), the
Table 3. Time series models predicting robbery rates in Canada 1963-1988.
First difference robbery

(.013)
Chg. unemployment rate (t-1) -.054*** -.054***
(-.540) (-.540)
Chg. unemployment rate -.024* -.001 -.001
(-.248) (-.007) (-.009)
Chg. cons. price index (t1-) 1.406*** 1.323*** 1.314***
(.625) (.587) (.584)
Chg. police force size .632** .615** .610**
(.419) (.408) (.405)
Chg. size of prison popn (t-l) -.820*** -.485** -.487**
(-.468) (-.277) (-.278)
Chg. relief 1980 dollars (t-l) -.0009* -.0002 -.0002
(-.246) (-.050) (-.046)
Chg. size of male popn 19.879*** 17.818*** 17.662***
(.522) (.468) (.464)
Adjusted R2 .447 .630 .608
Rho .024 .021 .018
Note: All coefficients are max

parentheses. Economic variab
***P<Ol(one-tailed); ** P<.0
419
Table 4. Time series models predicting theft rates in Canada 1963-1988
First difference theft

(.132)
Chg. unemployment rate (t-l) -.337 -.378
(-.208) (-.234)
Chg. unemployment rate .103 .166 .093
(.067) (.105) (.059)
Chg. cons. price index (t-l) 16.641*** 16.664** 15.430**
(.486) (.453) (.419)
Chg. police force size 5.486 5.549 5.466
(.223) (.225) (.222)
Chg. size of prison popn (t-1) -15.018*** -11.780*** -10.884**
(-.525) (-.412) (-.380)
Chg. relief 1980 dollars (t-1) -.016** -.012* -.010
(-.288) (-.204) (-.170)
Chg. size of male popn 315.54*** 319.61*** 287.91**
(.506) (.514) (.463)
Adjusted R2 .504 .503 .485
Rho .024 .021 .018
Note: All coefficients are maxi

parentheses. Economic variab
***P<O l(one-tailed); ** P<.
contemporaneous
effect is significa
primarily an econ
that high unemplo
year. Again, I fi
contention that u
stabilize and pacif
negative effect of
of robbery appear
for the similarity
acts of violence.
For the crime control variables, the size of the police force has a positive effect
on robbery rates supporting the hypothesis that increased police resources result
in greater crime detected (Koenig, 1991). As with the homicide model, the
negative relationship between the size of the prison population and crime rates
illustrates the incapacitating and deterrent effects of imprisonment. With respect
to placative control, the effect of welfare spending on robbery is essentially non-
existent (beta -.050).
420
Moving from robbery to the less violent crime of theft (Table 4), the
prediction model once again changes. The best-fitting model - model 1
showing 50.4 percent of variance explained and no autocorrelation - illustrates
that, as in the equations for robbery, an increase in the size of the male population
has a positive effect on theft rates as predicted. Similar effects appear, as well,
for the inflation rate when increases in the consumer price index in one year result
in increases in theft in a subsequent year, supporting the hypothesis linking fiscal
distress and crime control. The most notable difference here, however, is the
absence of the effect of unemployment either current or lagged, especially in
view of the fact that theft is essentially an economic crime.
Of the crime control influences, it is interesting to note the absence of the
effect of police force size on theft, although the size of the prison population does,
once again, appear to deter or incapacitate potential offenders (beta -.525).
Finally, the effect of relief spending, which is indicative of the state's attempt to
pre-empt criminal activity, supports the hypothesized relationship. Although the
standardized coefficient is relatively small (-.288), it does suggest that spending
on relief in one year is associated with lower theft rate in the following year. The
act of theft, born primarily of economic necessity, is neither an anti-social nor a
violent act. Increased welfare spending may partly preclude the need to steal, and
this may be represented in lower theft rates. Given that most thefts are not
reported to the police, however, the foregoing conclusion must be made with
caution since I am arguing that crime rates are more indicative of social control
than of crime committed.
In the final causal model in this paper, I examine the reciprocal nature of social
control and crime rates by testing a causal model of imprisonment, including
macro-economic conditions, social control policy, and crime rates as predictor
variables. The overall crime rate is included in this model as an indicator of crime
detected. The hypothesized relationship is that greater crime rates should result
in greater incarceration rates, if justice and punishment are administered consist-
ently. The equations for this model are presented in Table 5. With the exception
of current unemployment, all variables are lagged one year to ensure the
appropriate temporal order for testing the reciprocal effects of crime rates and
control policy.
The selected model, model 2, explains 53.3 percent of the variance in the size
of the prison population. The Durbin-Watson statistics for the three models are
somewhat larger than for the previous analyses, however, the statistics fall within
the upper and lower bounds of the Durbin-Watson table at the .05 level of
significance.
Similar to the model for homicide, the immediate and lagged effects of
unemployment are empirically significant. Here, as before, increased unemploy-
ment results in increased incarceration in the same year. The lagged effect
suggests that increases in unemployment in one year result in decreases in the
421
Table 5. Time series models predicting change in the size of the prison population in
Canada 1963-1988.
First difference prison population

(.065)
Chg. unemployment rate (t1) -.018** -.019**
(-.326) (-.351)
Chg. unemployment rate .019** .028*** .028**
(.336) (.507) (.500)
Chg. consumer price index (t-1) .607** .680*** .657***
(.455) (.510) (.493)
Chg. policeforce size (t-1) .320** .350** .342**
(.371) (.404) (.396)
Chg. relief 1980 dollars (t-1) .0005** .0009*** .0008***
(.266) (.441) (.423)
Chg. size of male popn (t-1) -4.509* -4.30* 4.176*
(-.207) (-.198) (-.192)
Overall crime rate (t-1) .151* .119* .121*
(.349) (.308) (.325)
Adjusted R2 .492 .533 .509
Rho -.141 -.194 -.237
Note: All coefficients are maximum-li

paretheses. Economic variables are i
***P<01 (one-tailed); ** P<.5 (on
prison population in the

the hypothesized direc
and once again, shows t
in the following year.
With regard to the cri
on imprisonment. This
for the placative eff
imprisonment, and h
necessarily related. My
on relief are both contr
underclass especially
increased imprisonme
rather the result of in
and Hale, 1986). The p
inflation rates is consi
control.
422
Direct crime control, as indicated by the change in the size of the police force
has a positive influence on prison rates as hypothesized. This finding is
attributable partly to the increased likelihood of crime detection by a larger
police force, and to the concurrent lock-'em-up strategies employed during
economic downturns, strategies which generally accompany greater policing
(Box and Hale, 1986). Itis interesting to note that the two control variables, crime
rate and the size of the male population are significant, but only at the .10 level
and their standardized coefficients are relatively small. The overall crime rate
influence suggests that imprisonment responds partly to crime detected, al-
though the effect is empirically unconvincing. The coefficient for the size of the
male population (-.198) suggests that in contrast to the hypothesis, an increase
in the size of the male population decreases the imprisonment rate in the
following year. Imprisonment is a phenomenon that is different for men and
women, generally biased against women. The negative coefficient suggests that,
in fact, imprisonment may be used more for female offenders than male
offenders, when the crime rate is held constant (Johnson, 1987; Gregory, 1986).
Conclusion
In this research, I have sought to develop and test models of changes in crime and
imprisonment rates by examining the causal influences of macro-economic
conditions and state crime control policy. While the results show similarities
across types of crime, some inconsistencies suggest that prediction models of
crime rates must account for the type of crime. As well, the final model of
imprisonment rates suggests quite clearly that imprisonment is not a phenom-
enon that follows directly from increased crime rates, but rather, as hypoth-
esized, from increased state scrutiny and punishment in reaction to economic
distress.
The findings for the crime rate models support the position that such models
need to contain both macro-economic and social control policy influences. With
regard to unemployment, changes in homicide rates appear especially suscepti-
ble to both past and current unemployment conditions. On moving from
more violent to less violent crimes, the influences of unemployment diminish to
the point where, for theft, both current and past estimates of unemployment are
non-existent. The positive effects of current unemployment on homicide endorse
the position that unemployment may create the conditions for violent crime.
This finding, coupled with the results for less violent crimes in which the
unemployment-crime relationship does not hold, argues against the motivational
nature of economic deprivation and in favour of the state's increased social
control programs in response to perceived economic trouble. The lagged
unemployment term, which is significant for homicide and robbery, further
suggests that for rather serious crimes two factors may be at work: criminal
scrutiny is bolstered during economic lows, and pre-emptive strategies like
423
increased unemployment insurance programs buffer a population's tendency
toward violent crime. The absence of an unemployment effect for the theft model
further tends to refute the criminal motivation hypothesis in favour of the state
intervention argument. An important qualification - and a possible alternative
explanation - for these findings, however, is that homicide is the most reliable
crime statistic for operationalizing crime committed, while crime rates for less
violent offences are more indicative of social control policy - the war on crime
in response to moral panics, for example - rather than crime committed. As a
consequence, the lack of an unemployment effect for non-serious crimes must
be viewed with the cautionary note that theft rates dramatically underestimate
crime committed.
The findings regarding unemployment and crime rates endorse the conflict
position that unemployment rates compel governments to take action against an
increasingly potentially volatile population in the forms of increased criminal
detection and punishment (Spitzer, 1975; Box and Hale, 1986) and increased
placative social programs (Colvin and Pauly, 1983). This conclusion is extended
by incorporating inflation rate as another measure of fiscal distress. The results
here are rather convincing, especially for the economic crimes of robbery and
theft; higher rates of inflation occasion higher crime rates in subsequent years.
Again, I find support for the temporal connection between economic distress,
state reaction, and increased crime rates. It is worth noting, however, that
unemployment and inflation have somewhat dissimilar influences on crime
detected, a finding which endorses the position that unemployment and inflation
are conceptually different. I would argue that this difference is explained by state
fiscal and social policy which reacts to the inflation rate as an economic evil and
to the unemployment rate as a necessary condition of economic efficiency. The
driving force behind panic-driven state policy is inflation and not unemployment
- unemployment is envisioned only as a condition to be managed.
On moving from macro-economic conditions to state control policy, the
results become varied and somewhat inconclusive. That spending on relief
placates a potentially troubled population is supported marginally by the results
for robbery, and more conclusively for theft where increased welfare spending
prevents subsequent criminal activity, a position that is often stated in the critical
literature (e.g., Colvin and Pauly, 1983). My findings endorse this position,
although only for theft. Further, the relationship is reversed for the homicide
model and is in the opposite direction. It would appear that homicide does not
respond to welfare spending in the same way as does theft. As Devine, Sheley,
and Smith (1988) suggest, homicide's role in the resolution of the economic
privation-crime linkage is somewhat more difficult to envision. More likely,
homicide rates respond to closer social control and deterrence than to economic
need. Box and Hale (1986) have argued that the economy crime nexus is
necessarily complex and that social control agents are more likely to pursue
424
arrest and conviction during times of high unemployment and high inflation,
especially for serious crimes. Furthermore, Kennedy, Forde, and Silverman
(1989) have suggested that state programs complicate the associations between
economy, social disorganization, and crime.
For the dimensions of reactive state control, the size of the prison population
has a consistent negative effect on all three types of criminal activity, lending
overall support to the argument that the state is effective in controlling criminal
activity through the increased use of imprisonment either through deterrence or
incapacitation. However, the state's effectiveness in crime control through
increased policing appears only for robbery, partially supporting the thesis that
greater policing results in the increased processing of criminals and not in their
deterrence. Ironically, this is not the case for the most and the least serious crimes
in the analysis.
Finally for the three crime rate analyses, the size of the male population is
important to robbery and theft rates and not to homicide rates. While the
relationship between crime rate and the size of the male population has often
been noted - the size of the male population as an indicator of criminal potential
-it is interesting that the relationship does not hold for homicide rates.
The last empirical model in this paper provides only marginal support for the
hypothesized reciprocal relationship between crime rates and imprisonment; the
effect of crime rates on imprisonment is, with the exception of the male
population variable, the weakest in the model. Furthermore, the results consist-
ently support the previous conclusions regarding unemployment/inflation and
social control. Most importantly the conclusions regarding the reactive (police
force) and proactive (welfare) policies on imprisonment endorse the general
critical argument linking deteriorating macro-economic conditions and in-
creased social control.
The implications of these findings for macro-level theories of criminal
behaviour are many. First, the orthodox positions arguing for economic depri-
vation or criminal opportunity motivators of criminal activity are insufficient
in explaining crime rate changes. That considerations of state policy in response
to economic distress are important in such social-indicators research is
strongly supported by this research. Second, the relationship between unemploy-
ment rates and crime rates is not mechanistically direct; it is qualified by
whether the influences are manifest contemporaneously or subsequently. The
temporal order of this relationship is important in understanding how state
policy intervenes between unemployment and crime detected. Third, the con-
nections between relief spending and crime rates are consistent. This relation-
ship needs to be explored in light of the argument that welfare is a pre-emptive
crime control strategy rather than an attempt to distribute wealth. Last, it bears
repeating that social control strategies differ depending on the nature and the
seriousness of the specific crime and that research analyzing the relationship
425
between social-control policies and macro-economic conditions must account
for the type of crime.
It is difficult in such a research project to assess the degree to which crime
rates reflect crime committed or crime detected. Indeed, I am assuming in this
analysis that crime rates are indicative of social control initiatives primarily.
Unfortunately, statistics cannot tell us how social control activities arise in
response to moral panics (over illegal drug use and gang and ethnic violence), to
increased policing resources, or to directives that are based on partisan political
considerations. Furthermore, the data for this research are aggregated at the
national level and therefore do not reveal the vagaries of social control at the
provincial, municipal, or departmental level. Other more qualitative methodolo-
gies, then, are needed to address these issues. For example, observational studies
conducted at the community or departmental level might help unpack the
relationships between socio-economic conditions, social control policy, and
crime.
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The Influence of Economic Factors and Social Control Policy on Crime Rate Changes in

social control policy on crime rate changes

Canadian Journal of Sociology/Cahiers canadiens de sociologie 17(4) 1992 405

Economic distress and crime

Macroeconomic conditions Social control policy

Figure 1B. Hypothesized model of macroeconomic conditions, crime rate,

Prison population rate

Macroeconomic conditions Crime rate Social control policy

Current critical literature suggests that, similar to the relationship between

Size of the police force

Size of the prison population

Data and measurement

11. Chg. consumer price index (t-1) 1.00 .43 .12

12. Chg. size of prison population (t-1) 1.00 .39

Table 1B. Zero-order correlations among change in size of priso

5. Chg. unemployment rate (t-l) 1.00 .04 .29 .34 .41

6. Chg. police force size (t-l) 1.00 .58 -.56 .00

7. Chg. size of male population (t-l) 1.00 -.25 .22

8. Chg. consumer price index (t-1) 1.00 .07

9. Chg. relief 1980 dollars (t-1) 1.00

presented in Table 2. Equation 3 incorporates the lagged depende

Table 2. Time series models predicting homicide rates in Canada 1963-1988.

First difference homicide

Note: All coefficients are maximum

Table 3. Time series models predicting robbery rates in Canada 1963-1988.

First difference robbery

Note: All coefficients are max

First difference theft

Note: All coefficients are maxi

First difference prison population

Note: All coefficients are maximum-li

prison population in the

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