Page 17 - Education for Development:George Psacharopoulos University of Illinois at Urbana-Champaign, USA

Education for Development: What Policies?c15

interpret health information and use the right health inputs. This is an example

of the allocative efficiency effect of education, first postulated by Welch (1970).
Also, they may be more prone to protect the value of their human capital by
being non-smokers.

Crime

In the United States, there is a sharp drop in the probability of
imprisonment of blacks who have completed secondary education vs. high
school dropouts. A one-year increase in years of schooling in a State reduces

arrests by 11%. A 10-percentage-points increase in secondary school graduation
rates reduces arrest rates by 7%. A follow-up of the High/Scope Perry preschool
program that followed children to adult life found that by age 40 the fraction

arrested was reduced by 0.24 percentage points. A Syracuse preschool program
reduced participants who have been placed on probation to 6% relative to 22%
of the control group (Lochner, 2011).

High school graduation is associated with a long list of social benefits
lowering dependence the state for health and welfare benefits, lowering prison
costs and generating additional tax revenue. In the United States, a 1% increase

of high school completion rates generates an annual social benefit of $1.4 billion
due to the reduction of violent and property crimes (Lochner and Moretti, 2004).
In the UK, those without an education qualification have an eight times

higher probability to be convicted. A one-year increase in the average years
of schooling reduces arrests for property crimes by about 25%. Educational
subsidies for coursework completion reduces burglary rates from 22% to 6%. In

England and Wales a 1-year increase in the average years of schooling reduces
conviction rates for property crime by 20–30% and violent crime by roughly