Raimundo Undurraga, Centro de Economía Aplicada, Universidad de Chile

Paper: School Re-enrollment and Crime Prevention: The Role of Centralized Dropout Monitoring Systems (with Manuel Alcaíno)

Abstract: Dropout students present a significant challenge for policymakers andsociety, partly due to the well-documented link between school dropout and juvenilecrime. While many dropout prevention policies have proven cost-effective in keepingstudents enrolled, evidence on how to successfully re-enroll those who have alreadyleft the school system—arguably at greater risk of engaging in crime—remainssurprisingly scarce. MINEDUC Chile developed a centralized dropout monitoringsystem to identify dropouts in a timely manner and provided all public schools withreports encouraging their re-enrollment. The list of dropout students for each schoolonly included those who had dropped out before May 30, 2022. We identify thecausal effect of being listed in the report by leveraging this predetermined cutoffdate as an exogenous determinant of eligibility for inclusion, and exploit it in a RDdesign to compare high-school students who dropped out from the same school justbefore and just after the cutoff date. We find the reports increased re-enrollment by17% in the following two months from reports’ distribution, which in turn led to acomparable increase in grade completion by the end of the year. As a result of thereport-driven increase in school re-enrollment, two years later the violent crime rateof listed dropouts was 79% lower compared to non-listed dropouts. Instrumentingschool re-enrollment by report eligibility allows us to provide a causal re-enrollment-crime (arc-)elasticity, estimated at -3.98. The cost of implementing dropout reportsat scale averages US$93 per dropout student, resulting in a benefit-cost ratio of 103:1for preventing violent crime. Without considering labor market returns, scaling-upthe reports to all dropout students would yield to juvenile crime-reduction savingsequivalent to US$ 30 million, or about 0.01% of Chile’s GDP. Centralized dropoutmonitoring systems offer a cost-effective solution to tackle the dropout-crime cycle.