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Human capital in the inner city

  • Dionissi Aliprantis

Black males in the United States are exposed to tremendous violence at young ages: In the NLSY97 26 percent report seeing someone shot by age 12, and 43 percent by age 18. This paper studies how this exposure to violence and its associated social isolation affect education and labor market outcomes. I use Elijah Anderson’s ethnographic research on the “code of the street” to guide the specification of a model of human capital accumulation that includes street capital, the skills and knowledge useful for providing personal security in neighborhoods where it is not provided by state institutions. The model is estimated assuming either selection on observables or dynamic selection with permanent unobserved heterogeneity. Counterfactuals from these estimated models indicate that exposure to violence has large effects, decreasing the high school graduation rate between 6.1 and 10.5 percentage points (20 and 35 percent of the high school dropout rate) and hours worked between 3.0 and 4.0 hours per week (0.15 and 0.19 s).

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Paper provided by Federal Reserve Bank of Cleveland in its series Working Paper with number 1302.

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Date of creation: 2013
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Handle: RePEc:fip:fedcwp:1302
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  12. David Card & Jesse Rothstein, 2006. "Racial Segregation and the Black-White Test Score Gap," NBER Working Papers 12078, National Bureau of Economic Research, Inc.
  13. Dionissi Aliprantis, 2011. "Assessing the evidence on neighborhood effects from moving to opportunity," Working Paper 1101, Federal Reserve Bank of Cleveland.
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  15. Janet Currie & Erdal Tekin, 2012. "Understanding the Cycle: Childhood Maltreatment and Future Crime," Journal of Human Resources, University of Wisconsin Press, vol. 47(2), pages 509-549.
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  23. Lance Lochner, 2004. "Education, Work, and Crime: A Human Capital Approach," NBER Working Papers 10478, National Bureau of Economic Research, Inc.
  24. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
  25. O'Flaherty, Brendan & Sethi, Rajiv, 2007. "Crime and segregation," Journal of Economic Behavior & Organization, Elsevier, vol. 64(3-4), pages 391-405.
  26. Stephen B. Billings & David J. Deming & Jonah E. Rockoff, 2012. "School Segregation, Educational Attainment and Crime: Evidence from the end of busing in Charlotte-Mecklenburg," NBER Working Papers 18487, National Bureau of Economic Research, Inc.
  27. David Austen-Smith & Roland G. Fryer, 2005. "An Economic Analysis of "Acting White"," The Quarterly Journal of Economics, MIT Press, vol. 120(2), pages 551-583, May.
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  29. Dionissi Aliprantis & Daniel Carroll, 2012. "Neighborhood dynamics and the distribution of opportunity," Working Paper 1212, Federal Reserve Bank of Cleveland, revised 01 Oct 2013.
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