Organised crime and educational outcomes in Southern Italy: An empirical investigation.

This paper explores the relationship between the presence of organised crime into the local socio-economic fabric and educational outcomes in Southern Italy. For this purpose, we rely on different indices of organized crime, the main of which is the well-established Mafia Presence Index (IPM), a composite indicator capturing manifold dimensions (activities, violence, political, and economic infiltration) of the presence of Mafia -type organizations on the national soil. These indices proxy the (scale of) negative Mafia -type values that permeate a local society and that are likely to hinder educational achievements, distorting the incentives of both the youngsters (and/or their parents) to invest in human capital and the local firms to employ those who decide to make this investment. Furthermore, combining contemporary individual-level educational outcomes with historical data on Mafia infiltration, we control for endogeneity concerns through an IV strategy. We provide evidence that the presence of organised crime at local level significantly decreases the scores achieved by primary school students, undertaking the INVALSI test for literacy in Southern Italy. Our results are robust to the use of different measures of organised crime, to the inclusion of different sets of controls, different subsamples and to relaxing the exclusion restriction in the IV strategy. • We explore the link between organized crime (OC) and education outcomes (EO) in Italy • We claim that OC can hinder EOs by distorting incentives to invest in human capital • We rely on different indices of OC at the local level • We find that an increase in OC leads to a decrease in EOs • Results are robust to different controls, subsamples and to IV strategy [ABSTRACT FROM AUTHOR]