Why Does Education Reduce Crime?

Research on the economics of crime demonstrates that a beneficial, unintended consequence of education policies that raise the school leaving age is reduced criminality. In this lecture, I consider the way in which these crime reductions come about by focussing in detail on how such dropout age policies have scope to alter the shape of the crime-age profile. US evidence from a sequence of state-level reforms enacted in the 1980 to 2010 time period, and Australian evidence from an earning or learning reform from the 2000s, shows that these policies significantly alter crime-age profiles. The observed change in the shape is consistent with there being both a temporary incapacitation effect and a more sustained crime reducing effect. These combine to generate sizable crime reductions from school dropout age policy reforms. In contrast to previous research on earlier US reforms this does not arise solely as a result of education improvements, and so the evidence of a longer run effect is interpreted as one of dynamic incapacitation.