Neighborhood Effects on Youth Crime

We investigate the degree to which youth (ages 14-29) criminal offenses are influenced by neighbors, identifying causal effects with a natural experimental allocation of social housing in Copenhagen. We find that youth exposed to a one percentage point higher concentration of neighbors with drug criminal records are 6% more likely to be charged for criminal offenses (both drug and property crimes), and this impact manifests itself after six months of exposure. This neighborhood effect is stronger for previous offenders, and does not lead to criminal partnerships. Our exploration of alternative mechanisms suggests youth interaction in proximate residential context with older adults with drug crime experience as the most plausible source of neighborhood effects.