Resumen

This paper studies the dynamic response of crime to a positive income shock. We estimate the short- and medium-run effect of an increase in copper price on local economies and criminal activity in Chile, the world's leading copper producer. After a decade of high prices, mining municipalities exhibited an improvement on several economic outcomes but did not show lower crime rates compared to non-mining municipalities. To explain this counterintuitive result, we investigate heterogeneous dynamic effects and observe that property crimes decreased at the beginning of the boom. As unskilled employment is increasing only at the beginning of the boom, we discuss whether crime evolves due to temporary labor market adjustments.