Abstract
Many studies find a strong negative association between crime and education. This raises the question whether crime reduces investment in human capital or whether education reduces criminal activity. This article investigates posed question by using fixed-effect estimation on data of Australian twins. We find early arrests (before the age of 18) both to have a strong effect on human capital accumulation, as well as strong detrimental effects on adult crime. Schooling does not have an effect on adult crime if there is variation in early arrests. However, schooling reduces crime if there is little variation in early crime. (JEL code: I2, K42).
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