MacCoun and Reuter (1992:477) studied arrested drug dealers in Washington, D.C., during the mid 1980s. They report that most members of their sample had legitimate employment in addition to drug selling, concluding that “drug selling seemed to be a complement to, rather than a substitute for, legitimate employment.”

Fagan (1992), who studied labor force participation by drug dealers in the Washington Heights and Central Harlem sections of New York during the mid-1980s, reached a different conclusion. Fagan estimated an econometric model of the relation between participation in the legitimate labor force, drug-dealing activities, and indicators of skills, such as education levels. He found that increased drug market participation was associated with decreased participation in the legitimate labor force. Thus, drug selling and legitimate employment were substitutes. Fagan also found that increased education was associated with increased participation in legitimate labor. Fagan does not report how relative opportunities for legitimate and illegitimate employment may have changed over time or how individuals’ employment arrangements (legal versus illegal) may have changed. Fagan’s findings are suggestive but do not necessarily imply that increased opportunities or wages in the legitimate labor force attract drug dealers away from dealing. It is possible, for example, that, as in the Baltimore neighborhood studied by Simon and Burns (1997), the skills and motivation of those who sell drugs are so poorly matched to the needs of legitimate employers that no realistic change in relative employment opportunities would move them from drug dealing to legitimate jobs. Indeed, Fagan (1992:129) concluded that “in Central Harlem drug sellers are recruited largely from a universe of nonworkers who otherwise might not be in the labor force at all or would be engaged in other types of crime.” Similarly, he concluded that drug selling in Washington Heights “apparently attracts workers with less human capital, people who might not otherwise fare particularly well in the formal economy.”

Levitt and Venkatesh (1998) provide limited evidence for movement of drug dealers between legitimate and illicit employment. They quote one member of the gang they studied as saying that he quit his job at a fast food restaurant when he started earning a relatively high income by selling drugs but returned to the restaurant job when his drug-related earnings decreased. Levitt and Venkatesh also report that in the last year of their study, gang members’ wages from selling drugs increased substantially and their participation in the legitimate labor market decreased.

In summary, the available evidence is incomplete and conflicting on the extent to which drug dealing is a substitute for legitimate employment. A much better understanding of labor force participation and supply by drug dealers and potential drug dealers could be obtained if the

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