Policing, Schooling and Human Capital Accumulation

A substantial body of empirical and policy literature argues that schooling can be a powerful tool against criminality and violence. On the other hand, recent work has demonstrated that low levels of public safety can have serious detrimental effects on educational outcomes. This paper develops a model to analyze the roles that investments in education and in public safety have for students educational attainment. The model captures the main stylized facts of the literature and explores the optimal balance between investment in policing and schooling. The model analyses individual decisions to accumulate violence related skills (street capital) at the expense of human capital information in a setting where property rights require private efforts to be enforced. The model assumes that inhabitants of a region decide, during childhood, to allocate efforts to schooling and/or learning; street skills; that, as adults, will serve them in resolving violent conflicts in their favor. Hence, if the level of public safety, which is the only mean to prevent violent confrontations, is low, the incentives to study will also be lower. Moreover, one of the results establishes that those agents who accumulate more human capital, and hence are more productive, suffer a comparative disadvantage in exerting violence because their opportunity cost of doing so is higher. Therefore, if investments in public education increase the productivity spread between adult agents, the incentives to study might decrease and lead to a lower output, showing that the benefits of schooling can only be seized if they are complemented with enough public safety.