The Effect of Education Policy on Crime: An Intergenerational Perspective

This paper studies the intergenerational effects of education policy on crime, asking whether a compulsory schooling reform that reduced crime among those directly exposed also reduced crime among their children. The authors exploit the staggered municipal rollout of Sweden’s comprehensive school reform, implemented gradually between 1949 and 1962 across more than 1,000 municipalities, which increased compulsory schooling by one to two years, abolished tracking into academic and vocational streams after 6th grade, and introduced a uniform national curriculum. The parent generation consists of all individuals born in Sweden between 1945 and 1955 (approximately 447,000 men and 450,000 women), and their children form the child generation (426,721 sons observed from age 15 to 29). Crime is measured by administrative conviction records from the Swedish National Council for Crime Prevention covering 1973–2010.

The empirical strategy is difference-in-differences, comparing changes in conviction rates across cohorts in municipalities that implemented the reform at different times, with treatment assigned based on the parent’s birth municipality to avoid endogenous sorting bias. Standard errors are clustered at the municipality level. Parallel trends validity is supported by three tests: results are unchanged when municipality-specific linear trends are included, placebo tests using incorrect reform dates yield effects indistinguishable from zero, and residuals from crime regressions show no correlation with municipality-specific trends.

The main finding is a significant 0.79 percentage point (pp) decline in conviction rates among sons of fathers exposed to the reform (p-value < 0.002), representing a 3.4 percent reduction relative to baseline. The decline spans multiple crime types: violent crime fell by 0.27 pp, traffic-related crime by 0.45 pp, fraud by 0.22 pp, and other offenses by 0.41 pp — percentage reductions of three to six percent across categories. Multiple convictions fell by 0.43 pp (5.8 percent). These second-generation effects are driven entirely by paternal exposure: the impact of maternal reform exposure is an order of magnitude smaller and statistically insignificant, and the difference between paternal and maternal effects is itself significant (p-value 0.048 for any conviction, 0.009 for multiple convictions). Effects on daughters in the child generation are much smaller, with only the residual “other crime” category showing a significant 0.129 pp (15.5 percent) decline.

The asymmetry between paternal and maternal transmission is explained by the first-generation effects of the reform. For men, the reform increased schooling by 0.32 years, earnings by approximately 1 percent, the probability of white-collar employment by 1.2 percent, cognitive skills by 0.14 standard deviations, noncognitive skills by 0.17 standard deviations, spousal earnings by 1,022 SEK per year, and overall household income by approximately 1 percent. For women, the reform increased education by 0.21 years but did not raise earnings, household income, or white-collar employment, and did not reduce their already low crime rates. Only 13 percent of women in the 1945–55 cohorts were at or below the compulsory schooling threshold, versus 20 percent of men, substantially limiting the reform’s bite for women.

A mediation analysis decomposes the intergenerational transmission through three channels: fathers’ education accounts for 64.8 percent of the indirect effect, the decline in paternal crime accounts for 18.5 percent, and the increase in household disposable income accounts for 16.7 percent. The direct effect (unexplained by these mediators) accounts for 48 percent of the total effect. The paper also documents that children of treated fathers attended schools with lower peer crime rates and lived in neighborhoods with lower youth crime rates, supporting a neighborhood and peer effects channel alongside human capital and role-model channels.

Scope conditions: the study covers male children observed to age 29 in Sweden; results apply to a context of near-universal administrative records, a specific postwar schooling reform, and cohorts born 1945–1955 in a Nordic welfare state.

Q: What is the magnitude of the intergenerational crime reduction caused by the reform?

A: Sons of fathers exposed to the reform experienced a 0.79 pp decline in conviction rates (p-value < 0.002), corresponding to a 3.4 percent reduction relative to the baseline conviction rate of approximately 24 percent for the child generation by age 29. Multiple convictions fell by 0.43 pp, a 5.8 percent reduction. These magnitudes are similar in percentage terms to the direct crime reduction the reform caused among fathers themselves.

Q: Does the reform’s intergenerational effect on crime differ by the sex of the treated parent?

A: Yes. The intergenerational effect is driven entirely by paternal exposure to the reform: the effect of maternal exposure is an order of magnitude smaller and insignificant at any conventional significance level. The difference between paternal and maternal effects is statistically significant, with p-values of 0.048 for any conviction and 0.009 for multiple convictions. The paper attributes this asymmetry to the much weaker first-generation effects of the reform on women’s earnings, household income, crime rates, and neighborhood sorting.

Q: Which crime types declined significantly among sons of treated fathers?

A: Significant declines were found in violent crime (−0.27 pp, Romano-Wolf p-value 0.09), traffic-related crime (−0.45 pp, RW p-value 0.057), fraud (−0.22 pp, RW p-value 0.09), and other offenses (−0.41 pp, RW p-value 0.047), each representing a three-to-six percent reduction relative to the mean incidence of that crime type. Property crime and drug-related crime did not show significant declines.

Q: What were the direct effects of the reform on the parent generation’s human capital?

A: For men, the reform increased schooling by 0.32 years, earnings by approximately 1 percent, the probability of white-collar employment by 1.2 percent, cognitive skills by 0.14 standard deviations, and noncognitive skills by 0.17 standard deviations, all measured at military enlistment. Spousal earnings increased by 1,022 SEK per year and overall household income rose by approximately 1 percent. For women, education increased by 0.21 years and marriage market matches improved, but earnings, household income, and white-collar employment probability did not increase significantly.

Q: Why did the reform have stronger first-generation effects on men than on women?

A: The average share of individuals at or below the compulsory schooling threshold — the margin at which the reform was binding — was 20 percent for men but only 13 percent for women in the 1945–55 cohorts. Because fewer women were constrained by the old compulsory schooling limit, the reform increased their education by less and produced smaller downstream effects on earnings and labor market outcomes.

Q: What are the three channels through which the reform reduces child crime, and what is the relative contribution of each?

A: The paper identifies three channels: (1) the human capital channel, whereby increased parental education raises household income and child human capital; (2) the role model channel, whereby reduced paternal crime participation directly reduces son’s crime; and (3) the neighborhood and peer effects channel, whereby higher income enables sorting into lower-crime neighborhoods and better schools. The mediation analysis attributes 64.8 percent of the indirect effect to fathers’ increased education, 18.5 percent to the decline in paternal crime, and 16.7 percent to the increase in household disposable income. The direct effect unexplained by these three mediators accounts for 48 percent of the total effect.

Q: What is the role model effect, and how strong is it in the parent generation?

A: The role model channel operates through the strong intergenerational persistence in crime participation: sons are 2.06 times more likely to participate in crime if their fathers have been convicted (Hjalmarsson and Lindquist, 2012). The reform reduced the incidence of any conviction among treated men by 1.5 pp and repeat convictions by 1.5 pp — the latter representing an approximately 8 percent decline from a lower base. For women, the reform produced no reduction in crime, providing no analogous role model improvement through the maternal channel.

Q: How does neighborhood and school peer quality change for children of treated fathers versus treated mothers?

A: Sons of fathers exposed to the reform moved to neighborhoods with lower youth crime rates (−0.087 pp) and attended schools with lower peer crime rates (−0.077 pp). In contrast, sons of mothers exposed to the reform experienced higher neighborhood crime rates (p-value 0.06) and higher school peer crime rates (p-value 0.01), the opposite direction. This asymmetry helps explain why only paternal treatment generates significant second-generation crime reductions.

Q: What happens to other outcomes for children of treated fathers beyond crime?

A: Sons experienced a 1.2 percentile increase in school GPA (RW p-value 0.05), a 2.3 pp increase in employment (RW p-value 0.04), a matching 2.3 pp decline in unemployment benefit receipt, a reduction in hospitalization of 2.4 days (17 percent, RW p-value 0.02), and a decline in prescribed drugs of 31 doses (2.8 percent, RW p-value 0.09). The decline in prescribed drugs for sons is driven by nervous system drugs and painkillers, pointing to improved mental health. Daughters of treated fathers show a significant reduction in welfare dependency but no other significant improvements.

Q: How does the paper validate the parallel trends assumption?

A: Three tests are reported. First, including municipality-specific linear trends leaves the main coefficient unchanged (p-value 0.85 for the trend terms themselves). Second, placebo contrasts using incorrect reform implementation dates produce effects indistinguishable from zero for all tested dates. Third, graphical inspection of regression residuals shows no correlation with municipality-specific trends. Together these provide strong support for the identifying assumption.

Q: Are the results sensitive to using a linear probability model instead of a nonlinear model?

A: A Monte Carlo experiment was conducted replicating observed crime rates across municipalities and imposing the estimated average treatment effect. Assuming the true data-generating process is a probit model, the linear probability model biases the estimated average effect upward by only 5 percent — a difference that is statistically indistinguishable from zero in the actual data — validating the OLS approach.

Q: What is the broader policy implication of the findings?

A: The results show that well-designed education policies can reduce crime not only among the directly treated generation but also among their children, amplifying the social benefits of reform across generations. The authors interpret this as consistent with the theoretical framework of Becker and Tomes (1979) on intergenerational transmission of human capital, and suggest that education policy evaluations that focus only on the treated generation substantially understate total social returns.

Intergenerational transmission of education reform effects: the phenomenon whereby an education policy that raises parental human capital produces improvements in children’s outcomes — including crime — through multiple channels including resource increases, parental role modeling, and neighborhood sorting, beyond any direct policy exposure of the child generation.

Comprehensive school reform (Sweden, 1949–1962): a nationally mandated restructuring of compulsory schooling that extended required attendance by one to two years, abolished selection into academic and vocational tracks after 6th grade, and introduced a uniform national curriculum, rolled out staggered across 1,055 Swedish municipalities.

Human capital channel: the mechanism by which increased parental education raises earnings and household income, enabling greater investments in children’s development and exploiting complementarity between parental and child human capital in the skill production function, thereby raising children’s opportunity cost of crime.

Role model channel: the mechanism by which reduced parental crime participation directly reduces children’s crime, operating through the transmission of norms and information across generations; identified empirically by the strong intergenerational correlation in convictions (sons with convicted fathers are 2.06 times more likely to be convicted themselves).

Neighborhood and peer effects channel: the mechanism by which increased parental income from the reform enables sorting into residential neighborhoods and schools with lower youth crime rates, exposing children to peers less involved in illegal activities and thereby reducing their own crime participation.

Mediation analysis: a decomposition method following Heckman, Pinto, and Savelyev (2013) that quantifies the share of a total treatment effect accounted for by specific intermediate variables (here: fathers’ education, fathers’ crime participation, and household disposable income) versus the direct unexplained effect.

Conviction rate: the proportion of individuals in a given generation and observation window who received at least one criminal conviction in Swedish administrative records; used as the primary outcome measure because it captures offenses that led to a court appearance, excluding minor infractions resolved by direct fine.