The Road to Crime: An Unintended Consequence of the Interstate Highway System

Abstract

The necessity to overhaul national infrastructure has become one of the key issues of US domestic policy in recent years. While the benefits of infrastructure spending are often straightforward, its unintended consequences are less well understood. This paper studies the impact of transportation infrastructure on local crime, focusing on the construction of the Interstate Highway System (IHS), the largest public works project in US history. Using a staggered difference-in-differences design and a county-by-year panel dataset spanning all US counties between 1960 and 1993, we find that a highway opening in a county led to an 8% rise in total index crime. This effect is driven by property crime (burglary, larceny, and motor vehicle theft), although some evidence suggests an increase in violent crime as well. Exploring potential mechanisms, we show that the positive effect of highways on crime is concentrated in counties with low pre-existing stock of police resources where increased connectivity may have raised the returns to crime. Moreover, we find that highway construction induced higher local employment, average firm size, and the local population size, thus increasing the returns to criminal activity, and ultimately the risk of victimisation in the newly-connected counties.