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...cal institutions rather than in the characteristics or behavior of neighborhoodsresidents. The opportunity costs of criminal activity should be relatively greater in areas withsbetter public schools (=-=Lochner and Moretti, 2004-=-) and with access to public transportation. Thesprobability of punishment would also be expected to be higher in more affluent communities thatscan afford more or better policing (Levitt, 1997, 2002; ...

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...on the characteristics of criminals and considers which characteristics are more connected to higher criminal participation. In this latter case, policies that affect these characteristics can, if implemented successfully, be used to counter crime. In this paper, we focus on one such characteristic that has received some attention in the quantitative social science literature on the determinants of crime, namely education. In this literature, there is a (relatively small) body of work that attempts to establish a causal connection between crime and education (most notably the seminal paper of Lochner and Moretti, 2004) and a vast literature from various social science disciplines that does not.2 A drawback associated with almost all of this latter work is that it is difficult to ascertain whether the direction of causation flows from education to crime (and not the other way around). This, of course, matters if one wishes to consider appropriate policy responses to empirical findings. 1 UK evidence on the crime-police relation (in the context of the July 2005 terror attacks that hit London) is presented in Draca, Machin and Witt (2010) and evidence of crime reduction from a specific policy (the Street Crime...

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...y of being extremely risk averse with very high statistical significance. Clearly, children of parents who grew up in states that implemented more stringent compulsory 11The laws refer to the father when he was 15 years old and the observation will be missing if the father is absent. 12Acemoglu and Angrist (2000) found significant effects of both CA and CL dummies in a much larger dataset. We find it intuitive that the CA dummies have better explanatory power for high school graduation because they focus on years of schooling closer to the 12 years typically needed for high school graduation. Lochner and Moretti (2004) also find an effect of the CA dummies on high school graduation rates. Consistent with Acemoglu and Angrist (2000) and Lochner and Moretti (2004), we find (not tabulated) that the CA dummies do not affect college graduation rates in our sample. 13The magnitudes of the CL coefficients are also hard to interpret relative to the left-out dummy CL7. 15 T a b l e 3 : C o r r e l a t io n M a t r ix (1 ) (2 ) (3 ) (4 ) (5 ) (6 ) (7 ) (8 ) (9 ) (1 ) L og –R is k av er si on 1. 00 (2 ) P ar en ts ’ H S su m –0 .1 7 1. 00 (3 ) A ge 0. 20 –0 .2 8 1. 00 (4 ) B la ck 0. 08 –0 .3 1 –0 .0 7 1. 00 (5 ) Fe m...

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... since 1990 and 2000sCensuses do not distinguish between institutional types.sThe type of group quarters residence variable in the Censusshas previously been used as a measure of incarceration (e.g., =-=Lochner and Moretti, 2004-=-; Butcher and Piehl, 2005) orsboth incarceration and mental health (e.g., Borjas, Grogger, and Hanson, 2006).s22 Under the assumption that entering kindergartners must be five years old in late Septem...

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...t, although going to work or school tends to reduce the probability of being involved in criminal activities, having a high school degree has no significant effect. More recently, Lochner and Moretti =-=[76]-=- found that schooling significantly reduces the probability of incarceration and arrest. However, these results are based on types of crimes that do not allow to discriminate between the two categorie...