Schools, Neighborhoods, and the Long-Run Effect of Crime-Prone Peers

This paper examines how elementary-aged peers affect cognitive and non-cognitive outcomes from adolescence to adulthood. We identify effects by exploiting within-school and within-neighborhood variation in the proportion of peers with an arrested parent. Results indicate exposure to these peers reduces achievement and increases antisocial behavior during middle and high school. More importantly, we estimate that a five percentage point increase in school and neighborhood crime-prone peers increases arrest rates at age 19 - 21 by 6.5 and 2.6 percent, respectively. Additional evidence suggests these effects are due to attending school with crime-prone peers, rather than living in the same neighborhood.