The returns to criminal capital

Thomas A. Loughran, Holly Nguyen, Alex R. Piquero, Jeffrey Fagan

Research output: Contribution to journalArticleResearchpeer-review

38 Citations (Scopus)

Abstract

Human capital theory posits that individuals increase their labor market returns through investments in education and training. This concept has been studied extensively across several disciplines. An analog concept of criminal capital, the focus of some speculation and limited empirical study, remains considerably less developed theoretically and methodologically. This article offers a formal theoretical model of criminal capital indicators and tests for greater illegal wage returns using a sample of serious adolescent offenders, many of whom participate in illegal income-generating activities. Our results reveal that, consistent with human capital theory, important illegal wage premiums are associated with investments in criminal capital, notably an increasing but declining marginal return to experience and a premium for specialization. Furthermore, as in studies of legal labor markets, we find strong evidence that, if left unaccounted for, nonrandom sample selection causes severe bias in models of illegal wages. We discuss theoretical and practical implications of these results, along with directions for future research.

Original languageEnglish
Pages (from-to)925-948
Number of pages24
JournalAmerican Sociological Review
Volume78
Issue number6
DOIs
Publication statusPublished - 1 Dec 2013
Externally publishedYes

Keywords

  • criminal capital
  • illegal earnings
  • sample selection
  • social capital

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