Criminals are poorly educated. About 68% of state inmates dropped out of high school. Many researchers study whether this effect is causal. As usual, though, I’m more interested in whether the causal effect stems from signaling.
Education could reduce crime by enhancing
students’ job skills. But it could just as easily reduce crime by certifying
students’ job skills. If you only want to stop your kid from pursuing a life of crime, the mechanism is a red herring. If you want to stop kids in general from pursuing lives of crime, however, the mechanism is all-important. In the signaling model, to paraphrase a great meme
, “When everyone has a diploma, no one does.”
Empirically distinguishing human capital from signaling is notoriously tricky, but sheepskin effects
– discrete benefits from crossing academic finish lines – are a strong symptom of signaling. Sheepskin effects for income are enormous
. Are there comparable sheepskin effects for crime? The literature is sadly thin. But these figures from Lochner and Moretti
‘s influential 2004 AER piece reveal big sheepskin effects of high school graduation on incarceration, with graduation year providing roughly 2/3 of the benefit.