Education and Crime over the Life Cycle

Abstract

In this paper we ask whether policies targeting a reduction in crime rates through changes in education outcomes can be considered an effective and cost-viable alternative to interventions based on harsher punishment alone. In particular we study the effect of subsidizing high school completion. Most econometric studies of the impact of crime policies ignore equilibrium effects and are often reduced-form. This paper provides a framework within which to study the equilibrium impact of alternative policies. We develop an overlapping generation, life-cycle model with endogenous education and crime choices. Education and crime depend on different dimensions of heterogeneity, which takes the form of differences in innate ability and wealth at birth as well as employment shocks. PSID, NIPA and CPS data are used to estimate the parameters of a production function with different types of human capital and to approximate a distribution of permanent heterogeneity. These estimates are used to pin down some of the model's parameters. The model is calibrated to match education enrolments, aggregate (property) crime rate and some features of the wealth distribution. In our numerical experiments we find that policies targeting crime reduction through increases in high school graduation rates are more cost-effective than simple incapacitation policies. Furthermore, the cost-effectiveness of high school subsidies increases significantly if they are targeted at the wealth poor. We also find that financial incentives to high school graduation have radically different implications in general and partial equilibrium (i.e. the scale of the programmes can substantially change its outcomes).

The Spatial and Social Patterning of Property and Violent Crime in Toronto Neighbourhoods: A Spatial-Quantitative Approach

“…For property crime, a higher level of neighbourhood instability and a lower level of ethnic concentration are significantly related to higher crime rates. This confirms to the literature that indicates a broad pattern where crime tends to cluster around marginalised and socially disadvantaged communities that are characterised by low education [64,65], low income and low material resources [66][67][68], low labour market participation [69] and vulnerable family structure such as lone motherhood [70,71]. Individual characteristics of offenders are associated with property and violent crime in varying ways.…”

Vocational training programs and youth labor market outcomes: Evidence from Nepal

“…In much of the developing world, unemployment among the youth is extremely high: youths (ages 16-24) comprise 40 percent of the world's unemployed while accounting for only 17 percent of the world's population (United Nations, 2012;ILOSTAT, 2017). High unemployment is not only related to high poverty but also has a strong influence on other important social outcomes: it impacts crime rates (Blattman and Annan, 2016;Fella and Gallipoli, 2014), depression prevalence (Frese and Mohr, 1987), substance abuse rates (Linn et al, 1985), and rates of social exclusion (Goldsmith et al, 1997). Moreover, the low labor force participation of women is particularly pronounced in many regions of the world, resulting in female-specific consequences of unemployment and underemployment, such as low decision-making power in the household and domestic abuse (Majlesi, 2016;Lenze and Klasen, 2016).…”

Formal Employment and Organized Crime: Regression Discontinuity Evidence from Colombia

“…Fella and Gallipoli (2014) find that general equilibrium effects explain a substantial portion of the relationship between crime and schooling.…”