Risky moms, risky kids? fertility and crime after the fall of the wall

Abstract

Following the collapse of the Berlin Wall, the birth rate halved in East Germany. Using detailed state-cohort-level arrest-data, and a difference in differences strategy, we show that individuals born during this period of socio-economic turmoil were markedly more likely to be arrested than those conceived a few years earlier. This is the case for most crime types and both for boys and girls. Since these children grew-up in the same re-unified German environment, the differences in criminal activity are consistent with negative parental selection. We use individual-level data to highlight risk attitude as a potential mechanism linking maternal fertility decisions and children’s criminal activities. We show that mothers who gave birth between 1991 and 1993 in East Germany have a significantly greater preference for risk, and so do their children. Finally, we provide novel evidence of the strong correlation between high levels of risk preference and criminal participation.