13
educational attainment reduces crime and that the inverse relationship between crime and
education in figure 5 is not a correlational artifact arising from unobserved variables that are
common to both crime and education. Using Census data, they show that one more year of
schooling reduces the probability of incarceration by 0.37 percentage points for blacks, and 0.1
for whites.
14
To put this evidence in perspective, 23% of the black-white difference in average
incarceration rates can be explained by the differences in education between these groups. Using
the FBI’s Uniform Crime Reports, they find that the greatest impacts of education are associated
with reducing arrests for murder, assault, and motor vehicle theft.
Lochner and Moretti also calculate the social savings from crime reduction associated
with completing secondary education. They show that a 1% increase in the high school
graduation rate would yield $1.8 billion dollars in social benefits in 2004 dollars. This increase
would reduce the number of crimes by more than 94,000 each year (see table 5). The social
benefits include reduced losses in productivity and wages, lower medical costs, and smaller
quality-of-life reductions stemming from crime.
15
They also include reductions in costs of
incarceration.
16
High school graduation confers an extra benefit of 14-26% beyond private returns
captured by the high school graduate wages that are pocketed by graduates. This is an important
benefit of education beyond its private return that suggests overall under-investment in the
population of disadvantaged children at risk for committing crime. Completing high school raises
a student’s wages by about $10,372 per year (in 2004 dollars), and the direct cost of completing
one year of secondary school is approximately $8,000 per student in 1997 (in 2004 dollars).
Looking only at the savings from reduced crime, the return is $1,638-$2,967 per year, so that
expenditure is cost effective even if we ignore the direct benefits in earnings and even if we
assume that the benefits decline as the youths grow older.
14
Comparing the effect of educational expenditure with the effect of hiring an additional
police officer suggests that promoting education may be a better strategy. Using a somewhat
different framework, Levitt claims that an additional sworn police officer in a large U.S. city
would reduce annual costs from crime by about $200,000 dollars at a public cost of $80,000 per
year. These are recurrent annual costs.
Lochner and Moretti estimate that in steady state it would cost $15,000 per year in terms
of direct costs to produce enough high school graduates to reduce crime by the same amount.
This cost ignores foregone earnings in high school but it also ignores all of the benefits from high
school graduation documented in Heckman, Lochner, and Todd. If Levitt’s estimate is correct,
educational policy is far more effective per dollar spent than expenditure on police.
17
,
18
Trends in Children’s Home Environments and the Consequences of Adverse Environments
Demographers have documented that over the past forty years, the aggregate birth rate has
declined, but in the past few decades relatively more of all American children born are born into
adverse environments. The definition of adversity varies among studies, but the measures used
are strongly interrelated. Most scholars recognize that absence of a father, low levels of financial
resources, low parental education and ability, a lack of cognitive and emotional stimulation, and
poor parenting skills are characteristics of adverse environments. Determining the relative
importance of these factors is an ongoing debate. Each seems to play a factor in affecting child
outcomes.
Family Structure
Fewer children are living with two parents who are married. In 2003, 68% of children
15
under 18 lived with two married parents, down from 77% in 1980.
19
This percentage has
remained stable since 1995, after trending downward for many years. The percentage of children
who live with only one parent, or in a home where the parents are not married, increased by 8%
since 1980 to 28%. The percentage of children who live with no parents remained roughly
constant around 3-4% during this period. The source of single parenthood has also changed.
Relatively more children are living with a single parent who has never been married (see figure
6a).
The aggregate trends conceal a great deal of variation across demographic groups. In
2003, 77% of non-Hispanic White children lived with two married parents, while 20% lived with
only one parent or with unmarried parents. The corresponding percentages for Blacks were 36%
and 56%. For Hispanics, it was 65% and 31%.
20
Among Blacks, the percentage of children
living with a never-married parent has increased dramatically over time.
21
Non-Marital Childbearing
Since the 1965 Moynihan Report, many analysts have focused on family structure—the
absence of a parent and the attendant decline in financial, emotional and cognitive resources—as
an important source of social problems.
22
Over time, while the birth rate has fallen, births to
unmarried women have risen until very recently.
After rising dramatically since 1940, out-of-wedlock childbearing leveled off in the 1990s
but remains at a very high level.
23
The number of births to unmarried women increased from
1.17 to 1.3 million between 1990 and 1999. The birthrate for unmarried women increased from
43.8 births per 1,000 unmarried women aged 15-44 years in 1990 to 46.9 in 1994, before falling
back to 43.9 in 1999.
24
The percentage of all births to unmarried women has risen from 28% in
1990 to 33% in 1999, though it has been roughly constant at 32-33% since 1994. To put these
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