Título en español.

Abstract

This paper analyzes the effect of the underground economy on eight indicators of crime, using a simple model of linear regression as a control for different economic and demographic indicators. The main finding is the evidence of a direct relation between production in the informal economy and criminal activity. Apparently as individuals participate in the informal market they assume behaviors characteristic to this type of work, drawing themselves into criminal activity. Another finding is that changes in the informal economy mainly affect property crimes.