Abstract
We develop a two-period overlapping generations model in which both the family structure and the decision to commit crime are endogenous and the dynamics of moral norms of good conduct is transmitted intergenerationally by families and peers. By “destroying” biparental families and putting fathers in prison, we show that more intense crime repression can backfire because it increases the possibility that criminals’ sons become criminals themselves. Our model also explains the emergence and persistence of urban ghettos characterized by a large proportion of broken families, high crime rates, and high levels of peer socialization, which reinforce criminal activities. (JEL I28, J12, J15, K42, R23, Z13)
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