1 INDIAN JOURNAL OF CRIMINOLOGY - Volume 48(1) 2020 MOTIVATION VS OPPORTUNITY FOR CRIME: AN ECONOMETRIC ANLAYIS OF THE EFFECT OF UNEMPLOYMENT ON VEHICLE THEFT IN INDIA T. Lakshmanasamy* ABSTRACT School dropout and consequent unemployment are the major causes of crime, especially property theft. The causal relationship between school dropout, unemployment and crime in India is examined using panel data at the state-level for 2012 to 2016. Econometrically, the effects of the unemployment rate and school enrolment rate on motor vehicle theft are estimated by the panel fixed effects and random effects methods. The panel estimates show that motor vehicles theft increases by 1.4 to 1.7 times and decreases by 2 to 11 percent with an increase in the unemployment and school enrolment rates respectively. The study reveals the dominance of ‘opportunity effect’ over the ‘motivational effect’ on criminal behaviour. The paper suggests that the correctional focus should shift from ‘supply of offenders’ to ‘supply of victims’. KEY WORDS School Dropout, Unemployment, Crime, Vehicle Theft, Panel Fixed and Random Effects Estimation *Formerly Professor, Department of Econometrics, University of Madras, Chennai. Email: tlsamy1960@gmail.com Introduction Persistence of unemployment is one of the major characteristics of India. The unemployment situation, especially the educated unemployment, is grim and increasing by millions in recent years. The reasons for this persistent unemployment scenario are (i) high population, (ii) poverty, (iii) illiteracy and higher dropout from schools, (iv) excess dependence, low productivity, lack of alternative employment in agriculture, (v) lack of mobility, (vi) unskilled workforce, (vii) lack of information on opportunities and gainful employment, and much more. Though the scope and levels of educated employment opportunities have improved in recent years, poor skill and technical knowledge plague gainful earnings opportunities. Being the second-largest populated country, India has the advantage of reaping demographic dividend with its sizable 65 percent population are below the age of 35. But, the majority of the youths are without skills and training, and gainfully unemployable. As a result, there exists huge youth unemployment in India. Added to this many youths drop out of schools and colleges for various reasons. The high school dropout and unemployment levels, in conjunction with the lack of job opportunities for these unskilled and poorly educated youths, adversely affect the youth psychology and their behaviour in India. A major consequence of India’s massive unemployment situation is its direct impact on crimes and unlawful activities of youths. The increasing crime rates is a result of the deterioration of living standards and lack of gainful employment for youths. The pursuit of materialistic living and the lack of opportunity to earn money pushes the youths to engage in unlawful and criminal activities. Added to this are their family commitments and the consequent psychological and emotional pressures. In their urge for quick money makes youths vulnerable to offences like burglary, theft, fraud, extortion, robbery,