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Education and Crime over the Life Cycle

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  • Giulio Fella

    (Queen Mary, University of London, UK and The Rimini Centre for Economics Analysis, Rimini, Italy)

  • Giovanni Gallipoli

    (University of British Columbia, Canada)

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 modelÕs 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).

Suggested Citation

  • Giulio Fella & Giovanni Gallipoli, 2007. "Education and Crime over the Life Cycle," Working Paper series 15_07, Rimini Centre for Economic Analysis.
  • Handle: RePEc:rim:rimwps:15_07
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    1. Education & crime
      by chris dillow in Stumbling and Mumbling on 2008-07-23 18:50:49

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    Cited by:

    1. Gaurav Khanna & Carlos Medina & Anant Nyshadham & Jorge Tamayo, 2018. "Formal Employment and Organized Crime: Regression Discontinuity Evidence from Colombia," Borradores de Economia 1054, Banco de la Republica de Colombia.
    2. Ana Maria Ibanez & Catherine Rodriguez & David Zarruk, 2013. "Crime, Punishment, and Schooling Decisions: Evidence from Colombian Adolescents," Research Department Publications IDB-WP-413, Inter-American Development Bank, Research Department.
    3. Chao Fu & Kenneth I Wolpin, 2018. "Structural Estimation of a Becker-Ehrlich Equilibrium Model of Crime: Allocating Police Across Cities to Reduce Crime," Review of Economic Studies, Oxford University Press, vol. 85(4), pages 2097-2138.
    4. Margherita Borella & Mariacristina De Nardi & Fang Yang, 2019. "The lost ones: the opportunities and outcomes of non-college-educated Americans born in the 1960s," Working Papers 2019-022, Human Capital and Economic Opportunity Working Group.
    5. Deiana, C, 2016. "Local Labour Market Effects of Unemployment on Crime Induced by Trade Shocks," Economics Discussion Papers 16529, University of Essex, Department of Economics.
    6. Giulio Fella, 2011. "A Generalized Endogenous Grid Method for Non-concave Problems," Working Papers 677, Queen Mary University of London, School of Economics and Finance.
    7. Chakravarty, Shubha & Lundberg, Mattias & Nikolov, Plamen & Zenker, Juliane, 2019. "Vocational training programs and youth labor market outcomes: Evidence from Nepal," Journal of Development Economics, Elsevier, vol. 136(C), pages 71-110.
    8. Margherita Borella & Mariacristina De Nardi & Fang Yang, 2020. "The Lost Ones: The Opportunities and Outcomes of White, Non-College-Educated Americans Born in the 1960s," NBER Macroeconomics Annual, University of Chicago Press, vol. 34(1), pages 67-115.
    9. Ana Maria Ibanez & Catherine Rodriguez & David Zarruk, 2013. "Crime, Punishment, and Schooling Decisions: Evidence from Colombian Adolescents," Research Department Publications IDB-WP-413, Inter-American Development Bank, Research Department.
    10. Costas Meghir & Mårten Palme & Marieke Schnabel, 2011. "The effect of education policy on crime: an intergenerational perspective," IFS Working Papers W11/11, Institute for Fiscal Studies.
    11. Matthew Calver, 2015. "Closing the Aboriginal Education Gap in Canada: Assessing Progress and Estimating the Economic Benefits," CSLS Research Reports 2015-03, Centre for the Study of Living Standards.
    12. Ayesha Haider & Amjad Ali, 2015. "Socio-Economic Determinants of Crimes: A Cross-Sectional Study of Punjab Districts," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 3(11), pages 550-560, November.
    13. Bernt Bratsberg & Øystein Hernæs & Simen Markussen & Oddbjørn Raaum & Knut Røed, 2019. "Welfare Activation and Youth Crime," The Review of Economics and Statistics, MIT Press, vol. 101(4), pages 561-574, October.
    14. Francesco Drago & Roberto Galbiati & Pietro Vertova, 2011. "Prison Conditions and Recidivism," American Law and Economics Review, Oxford University Press, vol. 13(1), pages 103-130.
    15. dos Santos, Marcelo Rodrigues, 2009. "Labor Supply, Criminal Behavior and Income Redistribution," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 29(2), December.
    16. Chakravarty,Shubha & Lundberg,Mattias K. A. & Nikolov, Plamen V. & Zenker,Juliane & Chakravarty,Shubha & Lundberg,Mattias K. A. & Zenker,Juliane & Nikolov, Plamen V., 2016. "The role of training programs for youth employment in Nepal : impact evaluation report on the employment fund," Policy Research Working Paper Series 7656, The World Bank.
    17. Denis Fougère & Francis Kramarz & Julien Pouget, 2009. "Youth Unemployment and Crime in France," Journal of the European Economic Association, MIT Press, vol. 7(5), pages 909-938, September.
    18. Merlo, Antonio & Wolpin, Kenneth I., 2015. "The transition from school to jail: Youth crime and high school completion among black males," European Economic Review, Elsevier, vol. 79(C), pages 234-251.
    19. Tony Beatton & Michael P. Kidd & Stephen Machin & Dipa Sarkar, 2016. "Larrikin Youth: New Evidence on Crime and Schooling," CEP Discussion Papers dp1456, Centre for Economic Performance, LSE.
    20. Steve Brito & Ana Corbacho & Rene Osorio Rivas, 2014. "Remittances and the Impact on Crime in Mexico," IDB Publications (Working Papers) 85093, Inter-American Development Bank.
    21. Paul Heaton, 2008. "Childhood Educational Disruption and Later Life Outcomes Evidence from Prince Edward County," Working Papers WR-552, RAND Corporation.
    22. Chakravarty, Shubha & Lundberg, Mattias & Nikolov, Plamen & Zenker, Juliane, 2019. "Vocational training programs and youth labor market outcomes: Evidence from Nepal," Journal of Development Economics, Elsevier, vol. 136(C), pages 71-110.
    23. Margherita Borella & Fang Yang & Mariacristina De Nardi, 2019. "The changing opportunities and outcomes of non-college educated Americans," 2019 Meeting Papers 206, Society for Economic Dynamics.
    24. Cecilia Alonso, 2018. "Transferencias Monetarias y Crimen. Evidencia para la última década en Montevideo," Documentos de Investigacion Estudiantil (students working papers) 18-02, Instituto de Economia - IECON.
    25. Bilal Ahmed & Umair Abdullah & Sameea Akhtar∗, 2019. "The Relationship between Education and Crime Analysis (1991-2016): A Case Study of Pakistan," International Journal of Humanities, Arts and Social Sciences, Dr. Mohammad Hamad Al-khresheh, vol. 5(5), pages 171-182.

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    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education

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