Crime in Australia has a large social cost. The Australian Institute of Criminology estimated that it was $36 billion in 2005. Burglary and theft cost over $7 billion, violent crime over $5 billion while fraud constituted the largest amount – over $14 billion. Government expenditure on criminal justice alone amounts to over $12 billion a year, including nearly $3 billion on corrective services, according to the Report on Government Services 2011.
A new study published in the May issue of The Economic Journal shows significant decreases in property crime from reductions in the proportion of people with no educational qualifications and increases in the age of leaving school. It indicates that improving the education levels and attainment of individuals who would otherwise be on the margins of crime participation can act as a key policy tool in the drive to reduce crime. It also generates large social benefits.
The study found that the crime reducing potential of education applies more to property than violent crimes. There is evidence of a strong and significant crime reducing education effect for property crime, but no clear pattern emerged in regard to violent crime. However, the vast majority of crimes that occur are property crimes.
It estimated that a one per cent fall in the proportion of the population with no educational qualifications reduces property crime by between 0.85 and 1%. It calculated the average social benefits from this reduction in crime at between £54.1 and £62.7 million.
These are large social benefits, especially considering that the average cost to the government for a year of education for a secondary school student in 2007-8 prices was approximately £4,200. The study estimates the cost of making one per cent of those with no qualifications stay on and get some qualification as a result of raising the school leaving age amounts to a little over £20 million a year. After taking account of this increased cost, it estimated the net social benefit a decade after increasing the school leaving age would reach between £23 and £30 million a year.
The study concludes that the existence of a causal crime reducing effect of education has potentially important implications for longer-term efforts aimed at reducing crime. For example, policies that subsidise schooling and human capital investment have significant potential to reduce crime in the longer run by increasing skill levels. At the very least, it says, improving education amongst offenders and potential offenders should be viewed as a key policy lever that can be used in the drive to combat crime.
The study has immediate relevance to Australia. Evidence previously published by the Australian Institute of Criminology shows a strong relationship between domestic burglary and theft and the extent of youth male long-term unemployment and the failure to complete high school. School completion rates remain low in Australia, with only 66 per cent of students completing Year 12 in 2008. Increasing completion rates has the potential to significantly reduce property crime.
Stephen Machin, Olivier Marie & Suncica Vujic, The Crime Reducing Effect of Education, The Economic Journal, 121 (May): 463–484.