The Effect of Minimum Wage on Crime in United Sates Cities

Abstract

How do changes in the minimum wage affect crime rates at the city level? A large amount of empirical evidence suggests that at the state level, as the minimum wage increases, crime rates decrease. However, this is unclear at the city level, as many cities have different active minimum wages as the states they are located in. This project aims to answer this question by using changes in active city minimum wages to measure the effect on UCR crime rate data over the time period of 1985 to 2016. Ultimately, I found that an increase in minimum wage at the city level causes crime rates to decrease. Additionally, a change in minimum wage has more of an affect on violent crime rates than property crime rates. City-level minimum wage is not found to have a significant relationship with property crime rates, or aggregate crime rates. Out of the subcategories of violent crime, a change in minimum wage at the city level has the greatest impact on rape rates and robbery rates.