| Summary: | <p>In this article we test the hypothesis about the impact of oil prices shocks on the unemployment and crime rate on the example of oil-exporting country. According to the hypothesis, there exist a dependence of the labor market on oil revenue. A negative oil price shock should lead to a decrease in the employment rate, which in turn should lead to a rise in illegal forms of behavior. Illegal behavior is measured as an average of registered crimes (bribery and drug dealing). Based on data for 1990-2017 we study a case of Russia, using vector error correction model for detecting short- and long-term effects. Results show that oil prices and unemployment affect crime rate in the long-run in a case of oil-exporting country. Yet, in the short-run both negative oil shocks and a rise in unemployment rate lead to a statistically significant increase in bribery and drug dealing. A 1% decrease in oil price will lead to a 1,14% rise in bribery and drug dealing and a 1% increase in the unemployment rate leads to a 2,72% increase in drug dealing and bribery.</p><p><strong>Keywords:</strong> oil prices, unemployment, crime rate, bribery, vector error correction approach.</p><p><strong>JEL Classifications: </strong>Q41, E24, F43, K42</p><p>DOI: <a href="https://doi.org/10.32479/ijeep.6833">https://doi.org/10.32479/ijeep.6833</a></p>
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