Using nationally representative data at the district level from India in the period
2014-2019, this study examines how economic activity can influence the incidence of crime in
society. Whilst greater economic activity can reduce crime rates by lowering unemployment
and providing more economic opportunities, greater economic activity can increase crime rates
by widening social and economic disparities. We examine how these negative and positive
measures of economic activity interplay and jointly influence crime rates by considering two
specific types of crimes, namely crimes against women and property crimes. We find that both
economic activity and unemployment have a positive impact on crime rates at the district level;
however, the joint effect is negative, showing the marginal impact of unemployment on crime
rates reduces when economic activity increases in society. These effects are particularly
prominent for rapes and assaults in crimes against women and for burglary and theft, among
different types of property crimes. Our results are robust to endogeneity biases, alternative
estimation techniques, and heterogeneity analyses. Findings from this study have substantial
policy implications for developing countries like India, where both the incidence of crime and
youth unemployment are increasing over time. We show that increased economic activity in
aggregate can foster criminal activities, but higher economic opportunities and better
infrastructure can mitigate the adverse effects of unemployment on crime.