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Drug Dealing and Legitimate Self-Employment

  • Robert W. Fairlie

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

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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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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