Rethinking the crime reducing effect of education : the role of social capital and organized crime

Abstract

This paper estimates the causal effect of education on adolescent crime by exploiting a compulsory education reform implemented in 1999 in Italy. To identify the causal relation we use the reform as an instrument for adolescent high school enrollment, and compare the offending rates of the cohorts affected by the reform with the ones not affected. We find that one percentage point increase in the enrollment ratio reduces adolescent crime by 2.47 percent, and that the effect is highly heterogeneous across areas and mostly influenced by the degree of social capital and by the presence of organized crime. In areas characterized by pervasive organized crime, preventing adolescents from staying on the streets, by keeping them at school, is not enough to ensure the same crime reduction effect as in areas where organized crime is not pervasive.