The Effect of Growing Up in a High Crime Area on Criminal Behaviour: Evidence from a Random Allocation Experiment

This paper addresses the question whether the share of criminal youths in the neighbourhood where individuals grow up affect their probability to become engaged in criminal activity later in life. We address the problem of sorting by making use of a natural experiment where individuals were randomly allocated across spatial areas, carried out between 1986 and 1998 for refugee immigrants to Denmark. Our analysis focuses on the children of these refugees. We estimate the effect of the average crime conviction rates of youth in the municipality and year of assignment on the probability of being convicted of an offence committed later in life. Our main finding is that youth criminality in the area of assignment has a strong positive effect on conviction probabilities for young men, but a negative effect for young women, which is concentrated at a young age. We offer a number of explanations for this.