This study analyses the effect of local crime rates on residents’ mental health. Using longitudinal information on individuals’ mental well‐being, we address the problem of sorting and endogenous moving behaviour. We find that crime causes considerable mental distress for residents, primarily driven by property crime. Effects are stronger for females, and mainly related to depression and anxiety. The distress caused by one SD increase in local crime is 2–4 times larger than that caused by a 1 SD decrease in local employment, and about one‐seventh of the short‐term impact of the 7 July 2005 London Bombings.
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