Crime, Education and Peer Pressure

Department of Economics, University of Milan-Bicocca
Source: RePEc

ABSTRACT We present a dynamic two-period model of individual behaviour with heterogeneous agents in which individuals decide how to allocate their disposable time between education, crime and work in the legal sector. Education has a multiple role: it implies higher expected wages in the legal sector, increasing the opportunity cost of committing crime and it has a sort of “civilization” effect that makes more costly to engage in criminal activities. We model this effect by introducing a peer pressure function.

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