Relationship between MDA and juvenile crime and its impact on socioeconomic development – a theoretical framework for business and economics

Purpose A minimum dropout age (MDA) requires potential dropouts to stay in school until graduation. Most countries have an MDA at least 16. An MDA greater than 16 requires potential dropouts to stay in school for at least one more year, which immediately reduces their available time and opportunities to commit a crime in the community. This study aims to examine how a higher MDA reduces crime in the community. The authors then show a higher MDA helps potential dropouts to become an entrepreneur. Design/methodology/approach The authors develop an economic model of crime that shows how an MDA greater than 16 affects contemporaneous juvenile crime in the community. Considering an MDA of 16 as a benchmark MDA, a hypothetical example with simulated data on the USA is used. The authors then show how a higher MDA offers a financial opportunity for the professional development programs. Findings An MDA greater than 16 reduces crime in the community. Reducing crime allows preventing social and monetary cost on juvenile delinquency. This economic efficiency offers a financial ability for adolescent training and other development programs and thereby reduces unemployment and other adverse consequences of the society. Originality/value Unlike previous studies, the authors develop an economic model of crime that shows a hypothetical relationship between an MDA and contemporaneous juvenile crime in the community. A higher MDA allows more financial ability for juvenile development programs in high school to improve the entrepreneurial skills.