Economics at your fingertips  

Local Banking Market Frictions and Youth Crime: Evidence from Bank Failures

Amit Ghosh () and Salvador Contreras ()
Additional contact information
Amit Ghosh: Texas A&M International University
Salvador Contreras: The University of Texas Rio Grande Valley

Journal of Financial Services Research, 2022, vol. 61, issue 1, No 2, 43-75

Abstract: Abstract This paper examines the impact of local banking market frictions measured by bank failures on youth crime. Using a difference-in-differences framework, we find white and black youth violent crimes increase by 0.11 and 0.66 per 1000 people, respectively, following a bank failure. Further, we find white property crime, petty delinquency and drug crime increase by 0.29, 0.75 and 0.35 per 1000 people. Black youth see a rise in drug crimes by 0.88 per 1000 people. Results by gender reveal male drug crimes rise by 2.4 and female property crimes by 0.66 per 1000 people, respectively. The economic effects are most persistent for petty delinquency crimes committed by white youths. Furthermore, we find evidence that bank failures worsen local labor markets conditions by increasing white youth unemployment and reduce employment in the limited-services restaurant industry; channels that likely alter the opportunity cost of youth crime.

Keywords: bank failures; county-level analysis; criminal motivational effect theory; rational choice theory; youth crime; youth employment (search for similar items in EconPapers)
JEL-codes: G21 H0 R11 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

DOI: 10.1007/s10693-021-00370-z

Access Statistics for this article

Journal of Financial Services Research is currently edited by Haluk Unal

More articles in Journal of Financial Services Research from Springer, Western Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

Page updated 2022-05-12
Handle: RePEc:kap:jfsres:v:61:y:2022:i:1:d:10.1007_s10693-021-00370-z