Can education policy be used to fight crime?

Randi Hjalmarsson, Helena Holmlund, Matthew Lindquist

How should society fight crime? This column argues education policy should be part of the answer. Exploiting a Swedish education reform as a source of exogenous variation in years of education, it suggests that one additional year of schooling decreases the likelihood of conviction by 7.5% for males and by 11% for females.

How should society fight crime? Should we adopt tough-on-crime policies that increase monitoring and lengthen prison sentences? Or should we adopt a softer strategy aimed at alleviating poverty and combating discrimination?

In the past decade, economists have entered this ongoing debate in earnest. An excellent example of this new engagement is Cook and Ludwig (2011), which proposes three concrete policies for fighting crime:

Increasing mandatory schooling

Encouraging private self-protection initiatives; and

Raising alcohol taxes.

Their approach is not based on the rhetoric of soft versus hard strategies, but rather a rational choice framework in which effective policy makes crime less attractive and law-abiding behaviour more attractive and helps citizens make better-informed decisions. Furthermore, their suggestions are the by-products of the policy evaluation literature aimed at determining which policies actually work.

Here, we focus solely on their first suggestion – increasing mandatory education – and report a more detailed account of the research underlying the idea that education policy can, in fact, be used to fight crime.

The value of mandatory education

Theoretically, there are a number of reasons to expect an increase in education causes a decrease in crime. First, education increases wages and, therefore, the opportunity costs of committing a crime. Second, as highlighted by Lochner and Moretti (2004) and Lochner (2010), young people may learn to be more patient through schooling and place more weight on their potential future earnings. Becker’s (1968) economic model of crime implies that the increased opportunity costs and patience associated with higher education would decrease criminal activity. Third, those with more education may be more attached to legitimate society. Further, higher-educated people tend to have higher-educated peers, which can lead to a social multiplier or peer effect that further decreases criminal activity.

The current empirical evidence is based mainly on US and UK data and was briefly discussed in Lochner (2011) on this site. Lochner argues that we need more information about the causal link between education and crime in order to gain a better sense of the general validity of the US (Lochner and Moretti 2004) and UK (Machin et al 2011) findings. Do these findings hold for a wider set of countries and across different types of educational policies?

We answer this call by reporting the results from two new studies (Hjalmarsson et al 2011, Meghir et al 2011) that provide evidence and insights concerning the causal link between education and crime for another country (Sweden), for men and women, for different age groups, for different categories of crime, and, perhaps most remarkably, even across generations.

We begin by documenting that, as in the US and UK, Swedish criminals tend to be less educated than the rest of the population. Using police-register data, we find that the average years of schooling for males with at least one conviction is 10.8 while the average years of schooling for those with no convictions is 11.5. Similarly, females with at least one conviction have 11.4 years of schooling on average compared to 11.7 for females with no convictions.

Causal relationships

However, a number of empirical issues make it difficult to interpret the above described education-crime relationships as causal. It could simply be that the negative correlation between education and crime is produced by unobserved individual characteristics, such as low risk aversion, lack of patience, or low ability, that simultaneously place individuals at high risk of both crime and low educational outcomes. Another potential difficulty is reverse causality. How much of the observed negative correlation is driven by the effect of an individual’s criminality on his education outcomes? Hjalmarsson (2008) provides some evidence that this is a valid concern, at least with regard to crimes committed during the teenage years.

As Meghir et al (2011), we use micro-data and the Swedish compulsory-schooling reform to identify the causal effect of education on crime. The use of this reform as a source of exogenous variation in education was pioneered in Meghir and Palme (2005), which looked at the effect of the reform on educational attainment and earnings. The Swedish compulsory school reform, which primarily extended compulsory schooling from seven to nine years, differs from the US and UK reforms studied by Lochner and Moretti (2004) and Machin et al (2011). The Swedish reform was implemented at different times across municipalities during the 1950s and 1960s, which allows the estimation of the effect of the school reform net of any general equilibrium effects that the reform may have had on the Swedish labour market. Those who happened to have been exposed to two different school systems, but who are from the same birth cohort and who are working in the same labour market, are compared to each other.

Meghir et al (2011) study the effect of this reform on the crime of males directly affected by the reform and on the sons of those affected by the reform. Using a reduced-form specification, they find evidence of a negative effect of the reform on both the likelihood of conviction (a 5% reduction) and the number of convictions (a reduction of 0.25 crimes for those coming from poor backgrounds), but not on imprisonment. Perhaps more striking is their result that sons whose fathers were assigned to the school reform have a 2.5% lower probability of being convicted. They argue that these intergenerational effects operate through improved parenting and investments in children.

Our approach

Our recent paper (Hjalmarsson et al 2011) uses exposure to the same reform as an instrument for years of schooling and a 25% random sample of those born between 1943 and 1955 from Sweden’s Multigenerational Register (more than 400,000 people). Longitudinal data concerning income, education, parish, and municipality of residence in 1960, as well as criminal convictions and sentences for each individual for the years 1973–2007 were matched on to the data. We first confirm that the reform is a significant predictor of educational attainment. Exposure to the reform increases average educational attainment by 0.28 years for males and 0.16 years for females in our data.

The second stage of our analysis makes a number of important contributions to the literature. First, we study the effect of education on crime for both males and females; most previous studies look only at males. Second, we have more than 30 years of crime data; for the youngest cohort in our analysis, we have crime records beginning at age 18. This allows us to look at the effect of education on crime at various stages of the life cycle. Third, our crime data is also detailed enough to allow us to look at the effect of education on various types of crimes (violent, property, and other) as well as crimes that are serious enough to warrant a sentence to prison.

Our baseline estimates indicate that more schooling causes a significant decrease in criminal activity for both males and females at both the extensive and intensive margins. For males, one additional year of schooling decreases the likelihood of conviction by 2.4 percentage points (7.5%), the likelihood of incarceration by 1.1 percentage points (16%), the number of crimes by 0.40, and the number of days sentenced to prison by six. For females, one additional year of schooling significantly decreases the chance of conviction by one percentage point (11%) and the number of crimes by 0.09.

We also find strong evidence that these relationships persist across a number of dimensions. First, a significant negative effect of schooling on crime is seen across birth cohorts. Second, this negative effect of schooling on crime is observed across the life cycle. For instance, we see a significant negative effect on male convictions in each of the following age categories – 18-29, 30-39, and 40-49 – at both the extensive and intensive margins. Finally, for both males and females, schooling has a causal impact across crime categories, including both property and violent crimes.

Policy implications

These results are potentially quite important for two types of policymakers. First, for policymakers who evaluate the benefits and costs of policies that increase education, it is important to consider the value of non-pecuniary benefits, such as decreased crime, and not just the effect of the additional education on wages and employment. Second, policymakers tasked with decreasing crime should consider indirect channels to doing so, rather than just focusing on the likelihood and severity of punishment. Education policy can also be used to fight crime.

References

Becker, Gary (1968) “Crime and Punishment: An Economic Approach,” Journal of Political Economy 76(2), 169-217.

Cook, Philip J. Cook and Jens Ludwig (2011) “The Economists Guide to Crime Busting,” Wilson Quarterly 35(1), 62-66.

Hjalmarsson, Randi (2008) “Criminal Justice Involvement and High School Completion,” Journal of Urban Economics 63(2), 613-630.

Hjalmarsson, Randi, Helena Holmlund and Matthew J. Lindquist (2011) "The Effect of Education on Criminal Convictions and Incarceration: Causal Evidence from Micro-data," CEPR Discussion Paper 8646, November.

Lochner, Lance and Enrico Moretti (2004) “The Effect of Education on Crime: Evidence from Prison Inmates, Arrests and Self-Reports,” American Economic Review 94(1), 155-189.

Lochner, Lance (2010) “Education Policy and Crime,” NBER Working Paper 15894.

Lochner, Lance (2011) “The Impacts of Education on Crime, Health and Mortality, and Civic Participation,” VoxEU.org, October 17.

Machin, Stephen, Olivier Marie, and Sunčica Vujić (2011) “The Crime Reducing Effect of Education,” Economic Journal 121, 463-484.

Meghir, Costas and Mårten Palme (2005) “Educational Reform, Ability, and Family Background,” American Economic Review 95(1): 414-424.

Meghir, Costas, Mårten Palme, and Marieke Schnabel (2011), “The Effect of Education Policy on Crime: An Intergenerational Perspective,” Research Papers in Economic No. 2011:23, Department of Economics, Stockholm University.