In reply to yourself and the AC above you, let me provide a decent snip of the conclusion of a rather detailed study from Berkley:
There are many theoretical reasons to expect that education reduces crime. By raising earnings, education raises the opportunity cost of crime and the cost of time spent in prison. Education may also make individuals less impatient or more risk averse, further reducing the propensity to commit crimes. To empirically explore the importance of the relationship between schooling and criminal participation, this paper uses three data sources: individual-level data from the Census on incarceration, state-level data on arrests from the Uniform Crime Reports, and self-report data on crime and incarceration from the National Longitudinal Survey of Youth.
All three of these data sources produce similar conclusions: schooling significantly reduces crim- inal activity. This finding is robust to different identification strategies and measures of criminal activity. The estimated effect of schooling on imprisonment is consistent with its estimated effect on both arrests and self-reported crime. Both OLS and IV estimates produce similar conclusions about the quantitative impact of schooling on incarceration and arrest. The estimated impacts on incarceration and self-reports are unchanged even when rich measures of individual ability and family background are controlled for using NLSY data. Finally, we draw similar conclusions us- ing aggregated state-level UCR data as we do using individual-level data on incarceration and self-reported crime in the Census or NLSY.
Given the consistency of our findings, we conclude that the estimated effects of education on crime cannot be easily explained away by unobserved characteristics of criminals, unobserved state policies that affect both crime and schooling, or educational differences in the conditional probability of arrest and imprisonment given crime. Evidence from other studies regarding the elasticity of crime with respect to wage rates suggests that a significant part of the measured effect of education on crime can be attributed to the increase in wages associated with schooling. We further argue that the impact of education on crime implies that there are benefits to education not taken into account by individuals themselves, so the social return to schooling is larger than the private return. The estimated social externalities from reduced crime are sizeable. A 1% increase in the high school completion rate of all men ages 20-60 would save the United States as much as $1.4 billion per year in reduced costs from crime incurred by victims and society at large. Such externalities from education amount to $1,170-2,100 per additional high school graduate or 14-26% of the private return to schooling. It is diffcult to imagine a better reason to develop policies that prevent high school drop out.
Highlights are mine.