Drug Dealing and Legitimate Self-Employment

Robert Fairlie

Journal of Labor Economics, 2002, vol. 20, issue 3, 538-567

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.

Date: 2002
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Related works:
Working Paper: Drug Dealing and Legitimate Self-Employment (2014)
Working Paper: Drug Dealing and Legitimate Self-Employment (1999)
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