Description:
We employ a unique 10-year panel dataset from California to examine both the effect crime has on homelessness as well as the effect homelessness has on crime. Our main estimator accounts for endogeneity by incorporating dynamics, controlling for time invariant unobserved heterogeneity, and relaxing the strict exogeneity assumption for our key variables of interest. We find strong evidence that regions experiencing increases in property crime, but not violent crime, should expect a practically significant increase in homelessness, whereas increases in homelessness increases the number of violent crimes, but not property crimes. Robustness and falsification checks confirm the results.