Partners in Crime: Evidence from Recidivating Inmates

Studies that estimate criminal peer effects need to define the reference group. For peer effects that develop in prison, researchers have used the amount of time inmates overlap in prison, sometimes in combination with nationality, to define such groups. Yet, there is often little discussion about such assumptions, which could potentially have important effects on the estimates of peer effects. We show that the date of rearrest of inmates who spend time together in prison signals, with some error, co-offending, and can thus be used to measure reference groups. Exploiting recidivism data on inmates released after a mass pardon with a simple econometric model which adjusts the estimates for the misclassification errors, we document homophily in peer group formation with regard to age, nationality, and degrees of deterrence. There is no evidence of homophily with respect to education, employment status, and crime types. Unsurprisingly, mafia criminals have a high tendency of partnering up, though not only with other mafia members.