Research on the Relationship Between Unemployment Rate and Cybercrime

Abstract

While previous literatures on unemployment have primarily focused on its effects on traditional forms of crime, the relationship between unemployment and cybercrime remains underexplores. This paper addresses this gap by investigating how state-level unemployment rates influence the incidence of cybercrime complaints across the United States, using panel data spanning from 2004 to 2019. Drawing the data from the Internet Crime Complaint Center (IC3), the analysis employs both Ordinary Least Squares (OLS) and Fixed Effects (FE) regression models to estimates this relationship. Recognizing the role of technological infrastructure in facilitating or deterring cybercrime, the paper further examines the interaction between unemployment rates and broadband coverage. Results suggest that higher unemployment rates are positively associated with increased cybercrime complaints, especially in areas with widespread internet access, indicating a compounding effect. The findings have policy implications for cybersecurity enforcement and labor market interventions, especially during periods of economic downturn.