The SocioEconomic Determinants of Crime in South Africa: an Empirical Assessment

South Africa possess some of the highest reported crime statistics in the world, making the study of crime and its determinants of particular interest in this context. Since the seminal paper by Becker (1968), the body of economic literature around crime has been growing widely. However, the initial insights from this work of Becker (1968) still prove fundamental to economic applications of the incidence and determinants of crime. In the traditional economic model of crime, criminal behaviour depends on, amongst other things, the payoff from committing a crime successfully, conditioned by the likelihood of obtaining legitimate sources of income, together with this commensurate level of legal labour market income. Three socio-economic factors can initially be identified therefore, as playing an important role in our understanding of the incidence of crime: Unemployment, income levels, and the prevalent level of income inequality. High levels of unemployment mean that the probability of gaining a legal income would be low, whilst high levels of legal income simultaneously increases the payoff from criminal activity as well as increasing the opportunity cost of criminal activity. Hence, inequality also influences crime levels by providing a state whereby the benefits of crime are high (in high income or relatively high income areas) while the benefits of legitimate activities are simultaneously low. South Africa, as is now commonly known, has some of the highest unemployment rates in the world. Unemployment by the standard ILO definition was 27 percent in 2016 while the inclusion of discouraged workers raised the unemployment rate to 36 percent (Statistics South Africa, 2016). It is believed that unemployment in South Africa is structural in nature – the legacy of South Africa’s apartheid history has contributed to a skill-dependent economic growth path in a country with a dearth of skills (Bhorat, 2004; Bhorat & Hodge, 1999; Bhorat & Mayet, 2012; Burger and Woolard, 2005; Edwards, 2002). While all age groups suffer from high unemployment levels, the youth are most affected. Youth in South Africa face a daunting narrow unemployment rate of 55 percent (Statistics South Africa, 2016).1 Unemployment rates also differ vastly across racial groups in South Africa, with 39 percent of Africans being unemployed in the second quarter of 2016, as compared with 27 percent of Coloureds, 14 percent of Indians/Asians, and 8 percent of Whites (DPRU, 2016).