kets. Other research issues are more difficult to address. For example, persuasive research on the relation between retail and wholesale prices will not be possible unless and until improved price data become available.

Labor Supply Issues

It is likely that the prices of illegal drugs and the difficulty of obtaining them would increase if substantial numbers of retail dealers could be induced to accept legitimate employment in place of drug dealing. Higher prices and search costs, in turn, would tend to decrease drug consumption. Thus, it is useful to investigate the extent to which drug dealers respond to changes in legitimate employment opportunities. The central issue is the extent to which drug dealers move between illegal and legal employment in response to changes in employment opportunities, relative wages, and relative risks.

Labor economists have developed sophisticated models and statistical techniques for investigating individuals’ decisions to participate in the labor force or not, the process of searching for employment, and the means by which employees are matched to employers. However, empirical investigations of these topics rely on large cross-sectional and longitudinal datasets that provide detailed information about the employment status and history, earnings, education, and personal characteristics of probability samples of individuals. Similar data pertaining to actual and potential drug dealers do not exist. Therefore, it has not been possible to use the methods of labor economics to study labor supply in markets for illegal drugs.

There have, however, been several ethnographic and other less formal studies of labor supply in retail drug markets. These have taken place in several different cities, have gathered information from nonrandom and arguably nonrepresentative samples of individuals, and have reached conflicting conclusions.17 Simon and Burns (1997) studied a drug-dealing neighborhood in Baltimore, MD. They report that many of the drug dealers they encountered lacked the skills, self-confidence, and motivation needed to obtain and hold legitimate jobs. Richard Curtis (in an interview with committee members) reported that most of the dealers he knows in New York hold legitimate jobs and sell drugs on the side. He said that he had not seen dealers move in and out of the legitimate labor market.


Most existing studies are based on interviews of arrested drug dealers, records of a single drug-dealing organization, or observations of dealers in a single neighborhood. It is arguable that none of these is representative of dealers and potential dealers in a city.

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