IDEAS home Printed from https://ideas.repec.org/a/eee/soceco/v44y2013icp140-149.html
   My bibliography  Save this article

Cognitive ability and the division of labor in urban ghettos: Evidence from gang activity in U.S. data

Author

Listed:
  • Seals, Richard Alan
  • Stern, Liliana V.

Abstract

Hernstein and Murray (1994) famously argued that the division of labor in modern society is determined by individual differences in cognitive ability. This paper shows that differences in cognitive ability can also determine the division of labor in poor urban areas. We estimate the effect of IQ on time-to-first gang participation with data from the National Longitudinal Survey of Youth (NLSY97) and Project on Human Development in Chicago Neighborhoods (PHDCN). Results from both the NLSY97 and PHDCN indicate that low-IQ is a robust predictor of gang participation. There are two plausible explanations of this main finding: (1) low-IQ individuals may have comparative advantage in violence as their opportunity costs of engaging in legal activities are low and (2) gangs may prefer low-IQ individuals as a way to reduce agency costs. We find strong evidence in support of the hypothesis that persons with lower IQs have comparative advantage in criminal activity in the PHDCN dataset.

Suggested Citation

  • Seals, Richard Alan & Stern, Liliana V., 2013. "Cognitive ability and the division of labor in urban ghettos: Evidence from gang activity in U.S. data," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 44(C), pages 140-149.
    • Handle: RePEc:eee:soceco:v:44:y:2013:i:c:p:140-149
    DOI: 10.1016/j.socec.2012.11.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1053535712001151
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.socec.2012.11.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Edward L. Glaeser & Bruce Sacerdote & José A. Scheinkman, 1996. "Crime and Social Interactions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(2), pages 507-548.
    2. Randall G. Holcombe, 1994. "The Economic Foundations of Government," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-13230-0.
    3. Jens Ludwig & Greg J. Duncan & Paul Hirschfield, 2001. "Urban Poverty and Juvenile Crime: Evidence from a Randomized Housing-Mobility Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 655-679.
    4. Goldberger, A.S. & Manski, C.F., 1995. "Review Article: The Bell Curve by Herrnstein and Murray," Working papers 9502, Wisconsin Madison - Social Systems.
    5. Vimal Kumar & Stergios Skaperdas, 2009. "Organized Crime," Chapters, in: Nuno Garoupa (ed.), Criminal Law and Economics, chapter 10, Edward Elgar Publishing.
    6. Daniel Aaronson, 1998. "Using Sibling Data to Estimate the Impact of Neighborhoods on Children's Educational Outcomes," Journal of Human Resources, University of Wisconsin Press, vol. 33(4), pages 915-946.
    7. Lisa Sanbonmatsu & Jeffrey R. Kling & Greg J. Duncan & Jeanne Brooks-Gunn, 2006. "Neighborhoods and Academic Achievement: Results from the Moving to Opportunity Experiment," Journal of Human Resources, University of Wisconsin Press, vol. 41(4).
    8. Grogger, Jeffrey, 2002. "The Effects of Civil Gang Injunctions on Reported Violent Crime: Evidence from Los Angeles County," Journal of Law and Economics, University of Chicago Press, vol. 45(1), pages 69-90, April.
    9. Skaperdas, S. & Syropoulos, C., 1993. "Gangs as Primitive States," Papers 92-93-02, California Irvine - School of Social Sciences.
    10. Jeffrey R. Kling & Jens Ludwig & Lawrence F. Katz, 2005. "Neighborhood Effects on Crime for Female and Male Youth: Evidence from a Randomized Housing Voucher Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(1), pages 87-130.
    11. Heckman, James J. & Moon, Seong Hyeok & Pinto, Rodrigo & Savelyev, Peter A. & Yavitz, Adam, 2010. "The rate of return to the HighScope Perry Preschool Program," Journal of Public Economics, Elsevier, vol. 94(1-2), pages 114-128, February.
    12. James J. Heckman, 2008. "Schools, Skills, And Synapses," Economic Inquiry, Western Economic Association International, vol. 46(3), pages 289-324, July.
    13. Flavio Cunha & James J. Heckman & Susanne M. Schennach, 2010. "Estimating the Technology of Cognitive and Noncognitive Skill Formation," Econometrica, Econometric Society, vol. 78(3), pages 883-931, May.
    14. George A. Akerlof & Rachel E. Kranton, 2005. "Identity and the Economics of Organizations," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 9-32, Winter.
    15. Katz, Lawrence & Duncan, Greg J. & Kling, Jeffrey R. & Kessler, Ronald C. & Ludwig, Jens & Sanbonmatsu, Lisa & Liebman, Jeffrey B., 2008. "What Can We Learn about Neighborhood Effects from the Moving to Opportunity Experiment?," Scholarly Articles 2766959, Harvard University Department of Economics.
    16. David Skarbek, 2010. "Putting the "Con" into Constitutions: The Economics of Prison Gangs," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 26(2), pages 183-211.
    17. James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 411-482, July.
    18. Jeffrey R Kling & Jeffrey B Liebman & Lawrence F Katz, 2007. "Experimental Analysis of Neighborhood Effects," Econometrica, Econometric Society, vol. 75(1), pages 83-119, January.
    19. Dora L. Costa & Matthew E. Kahn, 2003. "Cowards and Heroes: Group Loyalty in the American Civil War," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(2), pages 519-548.
    20. Lawrence F. Katz & Jeffrey R. Kling & Jeffrey B. Liebman, 2001. "Moving to Opportunity in Boston: Early Results of a Randomized Mobility Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 607-654.
    21. Panu Poutvaara & Mikael Priks, 2007. "Unemployment and Gang Crime: Could Prosperity Backfire?," CESifo Working Paper Series 1944, CESifo.
    22. Will Dobbie & Roland G. Fryer, 2011. "Are High-Quality Schools Enough to Increase Achievement among the Poor? Evidence from the Harlem Children's Zone," American Economic Journal: Applied Economics, American Economic Association, vol. 3(3), pages 158-187, July.
    23. Case, A.C. & Katz, L.F., 1991. "The Company You Keep: The Effects Of Family And Neighborhood On Disadvantaged Younths," Harvard Institute of Economic Research Working Papers 1555, Harvard - Institute of Economic Research.
    24. Alan Seals, 2009. "Are Gangs a Substitute for Legitimate Employment? Investigating the Impact of Labor Market Effects on Gang Affiliation," Kyklos, Wiley Blackwell, vol. 62(3), pages 407-425, August.
    25. Arthur S. Goldberger & Charles F. Manski, 1995. "The Bell Curve: Review Article," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 762-776, June.
    26. Panu Poutvaara & Mikael Priks, 2011. "Unemployment and gang crime: can prosperity backfire?," Economics of Governance, Springer, vol. 12(3), pages 259-273, September.
    27. repec:wvu:wpaper:09-09 is not listed on IDEAS
    28. Grogger, Jeff, 1998. "Market Wages and Youth Crime," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 756-791, October.
    29. Durlauf, Steven N., 2004. "Neighborhood effects," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 50, pages 2173-2242, Elsevier.
    30. Mario Cleves & William W. Gould & Roberto G. Gutierrez & Yulia Marchenko, 2010. "An Introduction to Survival Analysis Using Stata," Stata Press books, StataCorp LP, edition 3, number saus3.
    31. Heckman, James J, 1995. "Lessons from the Bell Curve," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 1091-1120, October.
    32. Patrick L. Hill & Brent W. Roberts & Jeffrey T. Grogger & Jonathan Guryan & Karen Sixkiller, 2010. "Decreasing Delinquency, Criminal Behavior, and Recidivism by Intervening on Psychological Factors Other Than Cognitive Ability: A Review of the Intervention Literature," NBER Chapters, in: Controlling Crime: Strategies and Tradeoffs, pages 367-406, National Bureau of Economic Research, Inc.
    33. Russell S. Sobel & Brian J. Osoba, 2009. "Youth Gangs as Pseudo-Governments Implications for Violent Crime," Southern Economic Journal, John Wiley & Sons, vol. 75(4), pages 996-1018, April.
    34. Antony W. Dnes & Nuno Garoupa, 2010. "Behavior, Human Capital and the Formation of Gangs," Kyklos, Wiley Blackwell, vol. 63(4), pages 517-529, November.
    35. Peter T. Leeson, 2007. "An-arrgh-chy: The Law and Economics of Pirate Organization," Journal of Political Economy, University of Chicago Press, vol. 115(6), pages 1049-1094, December.
    36. J. V. Henderson & J. F. Thisse (ed.), 2004. "Handbook of Regional and Urban Economics," Handbook of Regional and Urban Economics, Elsevier, edition 1, volume 4, number 4.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Boutwell, Brian B. & Connolly, Eric J. & Barbaro, Nicole & Shackelford, Todd K. & Petkovsek, Melissa & Beaver, Kevin M., 2017. "On the genetic and environmental reasons why intelligence correlates with criminal victimization," Intelligence, Elsevier, vol. 62(C), pages 155-166.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aughinbaugh, Alison & Rothstein, Donna S., 2015. "Do cognitive skills moderate the influence of neighborhood disadvantage on subsequent educational attainment?," Economics of Education Review, Elsevier, vol. 44(C), pages 83-99.
    2. Jacob Vigdor & Jens Ludwig, 2007. "Segregation and the Black-White Test Score Gap," NBER Working Papers 12988, National Bureau of Economic Research, Inc.
    3. List, John A. & Momeni, Fatemeh & Zenou, Yves, 2020. "The Social Side of Early Human Capital Formation: Using a Field Experiment to Estimate the Causal Impact of Neighborhoods," IZA Discussion Papers 13966, Institute of Labor Economics (IZA).
    4. Patrick Bayer & Randi Hjalmarsson & David Pozen, 2009. "Building Criminal Capital behind Bars: Peer Effects in Juvenile Corrections," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(1), pages 105-147.
    5. Topa, Giorgio & Zenou, Yves, 2015. "Neighborhood and Network Effects," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 561-624, Elsevier.
    6. Del Bello, Carlo L. & Patacchini, Eleonora & Zenou, Yves, 2015. "Neighborhood Effects in Education," IZA Discussion Papers 8956, Institute of Labor Economics (IZA).
    7. Adriaan R. Soetevent, 2006. "Empirics of the Identification of Social Interactions; An Evaluation of the Approaches and Their Results," Journal of Economic Surveys, Wiley Blackwell, vol. 20(2), pages 193-228, April.
    8. Dionissi Aliprantis & Daniel R. Carroll, 2018. "Neighborhood dynamics and the distribution of opportunity," Quantitative Economics, Econometric Society, vol. 9(1), pages 247-303, March.
    9. ÖZGÜR, Onur & BISIN, Alberto, 2011. "Dynamic Linear Economies with Social Interactions," Cahiers de recherche 04-2011, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    10. John A. List & Fatemeh Momeni & Yves Zenou, 2020. "The Social Side of Early Human Capital Formation: Using a Field Experiment to Estimate the Causal Impact of Neighborhoods," Working Papers 2020-187, Becker Friedman Institute for Research In Economics.
    11. Bruce A. Weinberg, 2007. "Social Interactions with Endogenous Associations," NBER Working Papers 13038, National Bureau of Economic Research, Inc.
    12. Mari Rege & Kjetil Telle & Mark Votruba, 2012. "Social Interaction Effects in Disability Pension Participation: Evidence from Plant Downsizing," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(4), pages 1208-1239, December.
    13. Cooper, David J. & Rege, Mari, 2011. "Misery loves company: Social regret and social interaction effects in choices under risk and uncertainty," Games and Economic Behavior, Elsevier, vol. 73(1), pages 91-110, September.
    14. List, John A. & Momeni, Fatemeh & Zenou, Yves, 2019. "Are Estimates of Early Education Programs Too Pessimistic? Evidence from a Large-Scale Field Experiment that Causally Measures Neighbor Effects," Working Paper Series 1293, Research Institute of Industrial Economics.
    15. Zenou, Yves & List, John & Momeni, Fatemeh, 2019. "Are Estimates of Early Education Programs Too Pessimistic? Evidence from a Large-Scale Field Experiment that Causally Measures," CEPR Discussion Papers 13725, C.E.P.R. Discussion Papers.
    16. Anna Piil Damm & Christian Dustmann, 2014. "Does Growing Up in a High Crime Neighborhood Affect Youth Criminal Behavior?," American Economic Review, American Economic Association, vol. 104(6), pages 1806-1832, June.
    17. Paolo Buonanno & Daniel Montolio & Paolo Vanin, 2009. "Does Social Capital Reduce Crime?," Journal of Law and Economics, University of Chicago Press, vol. 52(1), pages 145-170, February.
    18. Weinhardt, Felix, 2014. "Social housing, neighborhood quality and student performance," Journal of Urban Economics, Elsevier, vol. 82(C), pages 12-31.
    19. Lea Eilers & Alfredo R. Paloyo & Peggy Bechara, 2022. "The effect of peer employment and neighborhood characteristics on individual employment," Empirical Economics, Springer, vol. 62(4), pages 1885-1908, April.
    20. Katz, Lawrence & Duncan, Greg J. & Kling, Jeffrey R. & Kessler, Ronald C. & Ludwig, Jens & Sanbonmatsu, Lisa & Liebman, Jeffrey B., 2008. "What Can We Learn about Neighborhood Effects from the Moving to Opportunity Experiment?," Scholarly Articles 2766959, Harvard University Department of Economics.

    More about this item

    Keywords

    Cognitive ability; Gang participation; Non-cognitive skills; Urban; Division of labor;
    All these keywords.

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:soceco:v:44:y:2013:i:c:p:140-149. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620175 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.