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Drug Dealing and Legitimate Self-Employment

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  • Robert W. Fairlie

    (University of California, Santa Cruz, and Joint Center for Poverty Research, Northwestern University and University of Chicago)

Abstract

Theoretical models of self-employment posit that attitudes toward risk, entrepreneurial ability, and preferences for autonomy are central to the individual's decision between self-employment and wage/salary work. I provide indirect evidence on this hypothesis by examining the relationship between drug dealing as a youth and legitimate self-employment in later years using data from the National Longitudinal Survey of Youth. I find that drug dealers are 11%21% more likely to choose self-employment than non-drug-dealers, all else equal. After ruling out a few alternative explanations, I interpret these results as providing indirect evidence supporting the hypothesis.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 20 (2002)
Issue (Month): 3 (July)
Pages: 538-567

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Handle: RePEc:ucp:jlabec:v:20:y:2002:i:3:p:538-567

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References

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Citations

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Cited by:
  1. Robert W. Fairlie & Alicia M. Robb, 2007. "Why Are Black-Owned Businesses Less Successful than White-Owned Businesses? The Role of Families, Inheritances, and Business Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 289-323.
  2. Fairlie, Robert W. & Holleran, William, 2012. "Entrepreneurship training, risk aversion and other personality traits: Evidence from a random experiment," Journal of Economic Psychology, Elsevier, vol. 33(2), pages 366-378.
  3. Bauernschuster, Stefan & Falck, Oliver & Heblich, Stephan, 2010. "Social capital access and entrepreneurship," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 821-833, December.
  4. Clark, Andrew E. & Senik, Claudia, 2004. "The (Unexpected) Structure of "Rents" on the French and British Labour Markets," IZA Discussion Papers 1438, Institute for the Study of Labor (IZA).
  5. Parker, Simon C., 2005. "Entrepreneurship Among Married Couples in the United States: A Simultaneous Probit Approach," IZA Discussion Papers 1712, Institute for the Study of Labor (IZA).
  6. Robert W. Fairlie & Alicia Robb, 2007. "Families, Human Capital, and Small Business: Evidence from the Characteristics of Business Owners Survey," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 60(2), pages 225-245, January.
  7. Mboutchouang, Vincent De Paul & Kenneck, Joseph Massil & Mbenga Bindop, Kunz Modeste, 2013. "Transmission Intergénérationelle de l’Entrepreneuriat et Performance des Unités de Production Informelles au Cameroun," MPRA Paper 50133, University Library of Munich, Germany, revised Aug 2013.
  8. Cho, In Soo, 2011. "Do Gender Differences in Risk Preferences Explain Gender Differences in Labor Supply, Earnings or Occupational Choice?," Staff General Research Papers 34651, Iowa State University, Department of Economics.
  9. Brown, Sarah & Dietrich, Michael & Ortiz-Nuñez, Aurora & Taylor, Karl, 2011. "Self-employment and attitudes towards risk: Timing and unobserved heterogeneity," Journal of Economic Psychology, Elsevier, vol. 32(3), pages 425-433, June.
  10. Carlos Casacuberta & Mariana Gerstenblüth & Patricia Triunfo, 2012. "Aportes del análisis económico al estudio de las drogas," Documentos de Trabajo (working papers) 0112, Department of Economics - dECON.
  11. Aidis, Ruta & van Praag, Mirjam, 2007. "Illegal entrepreneurship experience: Does it make a difference for business performance and motivation?," Journal of Business Venturing, Elsevier, vol. 22(2), pages 283-310, March.
  12. repec:dgr:uvatin:2004105 is not listed on IDEAS
  13. Ahn, Taehyun, 2010. "Attitudes toward risk and self-employment of young workers," Labour Economics, Elsevier, vol. 17(2), pages 434-442, April.
  14. Taehyun Ahn, 2011. "Racial differences in self-employment exits," Small Business Economics, Springer, vol. 36(2), pages 169-186, February.

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