The Social Impact of Fiscal Crisis: Investigating the Effects of Furloughing Public School Teachers on Juvenile Crime in Hawaii

Due to the large social costs of juvenile crime, policymakers have long been concerned about its causes. In the 2009-10 school year, the State of Hawaii responded to fiscal strains by furloughing all school teachers employed by the Department of Education and cancelling class for seventeen instructional days. We examine the effects of this unusually short school year to draw conclusions about the relationship of time in school with crime rates. We calculate marginal effects from a negative binomial model and find that time off from school is associated with significantly fewer juvenile assault and drug-related arrests, although there are no changes in other types of crimes, such as thefts and burglaries. These results are more pronounced in rural parts of the islands which tend to have lower educated, lower income households. JEL Classifications: J08, I24