The Economic Costs of Rape

Rape and sexual assault are common worldwide: one in twelve women across 28 EU countries have experienced a rape (European Institute for Gender Inequality, 2012). Yet there is no systematic evidence on how sexual violence affects women's economic outcomes.

We harness detailed administrative data from Finland to provide new empirical facts on the economic effect of rape on victims and its spillovers. A third of police reports for rape involved victims younger than 21 years old at the time of the assault. We show that the age-25 employment and college completion rates of younger victims are 12.8 p.p and 10 p.p lower respectively than those of other young women with the same (pre-event) GPA and family background. For older victims, we use a matched difference-in-difference design to show that rape has a large and persistent economic impact on women: victims' employment falls by 7.8 percentage points and their labor market earnings decline 16.5 % relative to observationally equivalent women in the five years following the assault.

These results are robust to controlling for a variety of shocks preceding rape that could make it more likely for a woman to be victimized and independently suppress her economic outcomes. We also document important spillovers of these crimes to the victim's parents and peers. Mothers and fathers experience significant declines in their employment and female schoolmates experience a deterioration in mental health. Last, we show that higher clearance rates of rape cases mitigate the negative impacts on victims. Together, these results indicate that preventing and addressing sexual violence is a vital economic issue.

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