SCHOLARLY ARTICLE

Temidayo James Aransiola, Marcelo Justus, Vania Ceccato | EconomiA

Rising levels of economic growth are beneficial for society only when accompanied by equitable income distribution. However, in the presence of structural income inequality, economic growth may exacerbate social issues, including crime. This study investigates the effect of GDP growth on crime, using homicide rates as a proxy for lethal violence. It examines the potential non-linear relationship between GDP and homicide rates and tests whether this relationship is conditioned by income inequality levels. Panel data from 36 OECD countries between 2000 and 2018 were used, and dynamic panel GMM models were estimated. The results reveal a dual effect of GDP on homicide rates and confirm that income inequality conditions the relationship between GDP and homicide rates, making GDP growth more effective in reducing crime in contexts with high inequality. This research contributes to the existing literature by providing new insights into the complex interplay between economic conditions, income inequality, and lethal crime in developed countries.

Full article: https://www.emerald.com/insight/content/doi/10.1108/ECON-10-2023-0163/full/html