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Drug Dealing and Legitimate Self‐Employment

Robert W. Fairlie^1,2,3

¹ University of California, Santa Cruz · ² University of Chicago · ³ Northwestern University

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.

DOI

10.1086/339610

Volume

20 (3)

Pages

538-567

Language

en

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BibTeX

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