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= Crime and Education =

Crime and education have proven to be correlated and empirical evidence over the years has been gathered to explore this relationship. Economists such as Lance Lochner, Enrico Moretti and Isaac Ehrlich using economic models have discovered both a negative and positive relationship between educational attainment and criminal behaviour, as well as the existence of reverse correlation linking the two. Economic models help set the basis to analyse and provide insights regarding possible policy implications that education may have on crime, as they justify its impact based on economic theory and hence is valued by policy makers.

Motivations
Educational attainment is recognised as a socioeconomic factor that can impact criminal behaviour. Empirical evidence gathered in Lochner and Moretti's paper "The Effect of Education on Crime: Evidence from Prison Inmates, Arrests, and Self-Reports" can be used by the government to evaluate and decide the appropriate policy-making decisions to reduce criminal behaviour. This topic also falls under the broader topic of criminology and statistical correlations of criminal behaviour that helps identify the probable causes of crime. Years of education has been identified as a factor that has an impact on criminal behaviour and research conducted on the subject has attempted to quantify the effects.

The Economics of Education and Crime
In economic theory, education is viewed as an investment in human capital that can generate greater future returns through increased income, experience and arguably better morals. However, theory also posits that there exists an opportunity cost that arises due to the sacrificed income an individual forgoes when he decides to study instead of joining the workforce. This same concept of an opportunity cost has been used by economists as an argument against indulging in criminal activity. Economic theory also states that individuals are rational utility maximising individuals who take risks based on their preferences. An individual can be risk-seeking, risk neutral or risk averse. In the context of education and crime, an individual who is risk averse is more likely to place a greater weight on the consequences of criminal behaviour due to fear of incarceration and the opportunity cost associated with it as explored by Lochner and Moretti in their 2004 paper, “The Effect of Education on Crime: Evidence from Prison Inmates, Arrests, and Self-Reports”.

Human Capital approach
Lochner (2004) explored the effect of educational attainment on crime using a Human capital approach. This approach identifies an individual’s expected lifetime income as a function of investment in human capital (education and training), work and crime and the idea that they decide how much time to allocate to each activity aware of the respective returns and costs attached to each decision. An investment in human capital has been proven to result in higher market wages and greater attainment of skills first explored in the Mincer earnings function, arising from the joint work of Gary Becker and Jacob Mincer. Increased criminal activity has the associated probability of incarceration attached to it which can result in lower income and consumption levels. Based on this function, individuals, considering their risk preference, who choose to allocate their time to human-capital raising activities such as education and job training will abstain from indulging in crime as the overall opportunity cost of engaging in criminal behaviour and being incarcerated would work against their investment in human capital. In other words, any punishment that may result in the individual not being able to work, increases the value of any time forgone. This opportunity cost can be seen to increase in two ways: Time taken to plan, avoid detection and commit the crime could be spent in other productive ways and the time spent incarcerated if caught would result in current and future consequences regarding work and income.

Lochner also in his paper states that a rational individual would weigh up the consequences of their actions based on their risk preference and an individual who is risk averse would place a greater weight on the consequences of criminal behaviour rather than the possible returns. He also posits that educational attainment and training increases over the period of a person’s life as does their opportunity cost. According to this approach, assault, robbery and dealing drugs: all crimes that require low skill levels are negatively correlated with education and age. Embezzlement, fraud, money laundering and forgery; white-collar crimes that all require a higher level of skill has been identified as being positively correlated with age and education. The Enron scandal is one such example that highlights their preference towards risk and their financial greed that motivated the individuals to engage in criminal activity. It can be said that they placed a greater weighting on their returns to crime and not on its possible consequences due to the belief that they would not get caught. There has been some empirical evidence that this type of crime is positively correlated to education as it may develop certain criminal skills. On the other hand, it has been argued that education imparts a better sense of judgement and instills morals that can discourage individuals from committing crimes. Morals such as honesty, kindness and respect obtained from social relationships formed at school and university can reduce the likelihood of violent crimes and the psychological returns to crime. Also, virtues such as patience can be obtained through education which reduces impulsive behaviour and can result in a greater weight being placed upon the consequences of criminal behaviour and the associated opportunity cost. Another factor that is focused on in Lochner, (2004) is the peer group that an individual may surround himself at school or university. The paper posits that an individual not at school may surround himself/herself with other dropouts that may be a negative influence but individuals who attend school or university are more likely to be around determined, career focused individuals that can encourage good decisions and discourage any harmful behaviour. However, there is little empirical evidence on this argument as there are other factors in school that may influence the behaviour of an individual to commit crime.

Model of Choice
Another model used to explore the same relationship was introduced by Isaac Ehrlich with contributions from Becker (1968) who used a simple model of choice that included legal and illegal activities. Individuals would make a decision based on the expected utility that they derive from the activity. Each activity would be a function of certain variables. For example, the paper postulates that illegitimate activity is dependent on the individuals legitimate and illegitimate earning opportunities, the probability and severity of punishment and probability and losses of unemployment in legitimate work. The severity of punishment also differs between crimes and this can be seen in the work conducted by Lochner who calculated that for each assault, the perpetrator can expect to spend 63 days incarcerated however the expected incarceration period for a burglary is only 13 days.

The Effects of Crime and its Consequences on Education
There is empirical evidence suggesting reverse causation between crime and education exists. Using the same model developed in the human capital approach proposed by Lochner, it can be seen that given an increase in time allocated to criminal activity, time allocated towards education falls resulting in lower benefits arising from investments in education as individuals only gain the qualifications required for a low-wage job. Anderson (2009) estimated the impact of forcing individuals to allocate more time towards education by exploring the impact of an increase in compulsory state schooling ages from 16 to 17 and from 17 to 18. His research discovered that the total arrests of 17 year olds reduced by 8% when the compulsory schooling age was increased from ages 16 to 17 and the total arrests of 18 year olds reduced by 9.7% to 11.5% when the compulsory schooling ages increased from 17-18 years of age. He also found out that the significant reduction in arrests was to do with property and violent crimes. Also, an increase in time allocated towards criminal activity can result in an increased probability of incarceration. When incarcerated the individual cannot benefit from schooling and any extra reward from additional schooling is reduced due to their criminal record inhibiting their ability to secure a job. In a research brief conducted by the Urban Institute: Justice policy centre in the United States of America, that focused on the employment opportunities after prison, it was founded that 70% of releasees felt that their criminal record prevented them from acquiring jobs two months after their release. As a result, an individuals decision to invest in education depends on other factors that affect the returns to crime. For example, the paper posits that favourable prison conditions or higher returns to crime can result in a lower investment towards education. This indicates a negative correlation between crime and education.

Also, the same argument concerning peer groups can be a factor affecting the schooling decisions of youth. For example, individuals who indulge in criminal activity and/or part of gangs can result in the individual making his own schooling decisions based on his peers. Lochner posits that these peers are more likely to be school drop outs and risk averse individuals who view an investment in education to be too risky and the returns to crime to be more enticing. There is little evidence that a reduction in arrests and incarcerations has an impact on schooling. But according to Lochner (2007) and economic intuition, criminal opportunities and law enforcement policies have an impact on the schooling decisions of youth.

Policies and Implications
Economic research has been conducted in order to find the best method to reduce criminal activity. The three general methods include increasing police presence, increase in education and policies concerning the prison system. According to Lochner and Moretti, their research concluded that increasing high school graduation rates is more effective than in expanding the police force. In another paper, Lochner explores the impact of early childhood/preschool programs as a preventative measure to reduce crime. Empirical evidence has shown that the Perry Preschool program has resulted in sizeable long term impacts in reducing crime while many other programs have proven ineffective. Also, programs focusing on improving the social development of individuals who exhibit violent tendencies can reduce juvenile/early adulthood crime.

As there is evidence that investment in education is an important factor in reducing criminal behaviour, policies that increase the cognitive ability of an individual or increase their ability to learn can also be effective as they increase the returns of education, and the associated cost of engaging in crime.

Head Start program
= References = Ehrlich, I. (1975). On the relation of education and crime. In: F. Thomas Juster, ed., Education, Income, and Human Behavior. pp.313-338.

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

Lochner, L. (2004). Education, Work and Crime: A Human Capital Approach. International Economic Review, 45(3), pp.811-843.

Lochner, L. (2007). Education and Crime. International Encyclopedia of Education. Elsevier. Vol. 2

Lochner, L. (2010). Education Policy and Crime. Cambridge, Mass: National Bureau of Economic Research.

Schweinhart, L.J., Montie, J., Xiang, et al. (2005). Lifetime effects: the High/Scope Perry Preschool study through age 40 (Monographs of the High/Scope Educational Research Foundation, 14). Ypsilanti: High/Scope Press.