Poverty and Crime: New Evidence from a Nationwide Poverty Reduction Project in China

Whether reducing the poverty rate helps to curb the growth of crime rates does not have a definitive answer in the current literature. This study utilizes the context of poverty alleviation projects in 592 poverty counties across China in 2015. By employing the difference-in-differences method and combining county-level data from 2014 to 2020, we empirically investigates the causal relationship between poverty reduction and crime rates. The study finds that the poverty alleviation projects significantly reduce crime rates in the regions, with this inhibitory effect primarily observed in property-related crimes, such as theft and robbery. Further analysis reveals that the increase in per capita annual income level is the main mechanism behind these results, and there have a spillover effect of this project. These findings hold under a series of robustness tests such as placebo test and parallel trend. As the largest developing country in the world, this research provides policy implications for poverty reduction practices in other developing countries.