The Effect of School and Neighborhood Peers on Achievement, Misbehavior, and Adult Crime

This paper assesses the importance of school and neighborhood peers in shaping educational achievement, adolescent misbehavior, and adult crime. Using cohort variation within Charlotte-Mecklenburg County, we focus on the impact of peers whose parents have been arrested, which is strongly and independently predictive of worse outcomes. Results indicate that a 5 percentage point increase in school peers linked to parental arrest reduces educational achievement by 0.016 standard deviations and increases adult arrest rates by 5%. Additional evidence indicates that peer effects are primarily driven by interactions in schools rather than in neighborhoods.