This paper investigates the effect of high school graduation requirements on arrest rates. The graduation requirements examined include the number of courses required for graduation as well as the existence and difficulty of high school exit exams. Many states have altered their high school curriculum in an attempt to improve the human capital acquired by their graduates. However, these changes also make it more difficult to graduate, leading to an increase in high school dropouts.  Either of these effects are likely to affect crime rates, so the net effect is an empirical question.

I examine changes in the arrest rates of people ages 15 to 24 following changes in these requirements. Identifying variation comes from changes in state laws governing high school graduation requirements from 1980 to 2000. By utilizing repeated cross sections of arrest data, I estimate the effects of across state-cohort differences in graduation requirements on arrest rates. This strategy allows me to control for other potential policy changes that would typically bias this type of estimate.  

I find evidence that using less difficult exit exams can reduce the arrest rate by 4.4%, but that making them too difficult may work to “undo” that effect – ultimately raising arrest rates for some individuals.  This effect is strongest on property crimes and in low-income counties. The effect is similar for both men and women.  There is no significant effect of raising course requirements and results are robust to several different specifications. While pinpointing the exact mechanism is not possible in this paper, there are signs that point to both human capital effects and dropout effects existing due to the increased rigor of the requirements.