Why are criminals less educated than non-criminals? Evidence from a cohort of young Australian twins

This paper investigates the question whether crime reduces investment in human capital or whether education reduces criminal activity by using fixed effect estimation on data of Australian twins. The study takes genetic and socio-economic factors shared by the twins into account. We find that early arrests (before the age of 18) have a strong effect on human capital accumulation. In addition, we find that education decreases crime. However, controlling for early arrests and early behaviour problems reduces the estimated effect of human capital on crime to less than on third of the previously estimated association. From this, we conclude that the strong association between human capital and crime is mainly driven by the effect of early criminal behaviour on educational attainment. The strong detrimental effects of early criminal behaviour become also transparent if we consider the estimated effects of early arrests on three measures of crime. We also find large effects of early criminal behaviour on participation in crime later on. This suggests that programs that succeed in preventing early criminal behaviour might yield high social and private returns.