The Benefits to Taxpayers from Increases in Students - RAND ...

64 The Benefits to Taxpayers from Increases in Students’ Educational Attainment
Second, and conversely, the convicted person’s criminal record can make it less
likely that he or she will be hired and more likely that a job will be low-paying. Former
prisoners face more unemployment and earn less compared with similar, nonincarcerated
men (Western, Kling, and Weiman [2001] summarize the related literature).
Third, increased educational attainment raises the wage that a person can demand
in the labor market. Thus, the value of any lost working time is higher for a person
with more education. This, in turn, raises the costs of crime for the individual in several
ways. Incarceration means lost time and lost wages from legal activities, as well as
a severe reduction in employment following the correctional period. Indeed, empirical
evidence showing that higher wages reduce crime is large and growing (e.g., Machin
and Meghir, 2000; Viscusi, 1986). This relationship between wages and crime is one
reason why older and more educated individuals commit less crime—they stand to lose
a lot more in salaries and wages if they are convicted.
On the other hand, an individual’s proficiency in committing most types of crime
and/or getting away with it does not necessarily rise with more schooling. For instance,
reading the works of Shakespeare, understanding how plants derive energy via photosynthesis,
or learning what “standard deviation” means do not make a youth better
at dealing drugs or mugging people. Hence, the more education a person obtains, the
bigger the rift between that person and the attraction of criminal activity.
There may be a relationship between education and white-collar crimes; moreeducated
people may be better at forgery or embezzlement, for example. However,
Lochner (2004) finds that although such a relationship exists, it is not statistically
significant. Similarly, Steffensmeier and Demuth (2000) find that more educated federal
defendants receive relatively short sentences in general, imposing less cost on the
correctional system. It is possible that some specific skills, such as learning the intricacies
of financial and management accounting, might make a person a potentially more
effective embezzler. However, on average, evidence does not support this idea with
regard to education in general. More likely, a small number of large-scale corporate
crimes make the headlines, and, as a result, the public forms an impression about the
prevalence of white-collar crime that is not supported by the numbers.
A number of recent studies find strong evidence that educational attainment is
negatively related to incarceration. Lochner (2004) compares high school graduates to
dropouts and finds a causal effect of schooling on various measures of criminal participation,
from criminal income to incarceration. He considers in his study other factors
that might have an influence on whether or not a high school dropout engages in
criminal activity or is incarcerated. These factors include the person’s age, personality
and other personal characteristics, and conditions in the location where the individual
lives. So, controlling for age, individual characteristics, and local conditions, Lochner
finds that high school graduates are 81 percent less likely to be incarcerated over a fiveyear
period than dropouts. Similarly, Pettit and Western (2004) find that high school
dropouts are about four times more likely to go to prison than high school graduates.