“Some will rob you with a six-gun, and some with a fountain pen”

As sang Woody Guthrie. And it seems the economic returns to higher education are so generalizable that they even hold for outlaws. Thanks to an anonymous reader for the link:

Is there any return to education in criminal activities? This paper is one of the first to investigate whether education has not only a positive impact on legitimate, but also on illegitimate activities. We use as a case study one of the longest running criminal corporations in history: the Italian-American mafia. Its most successful members were capable businessmen, orchestrating crimes that required abilities that might be learned at school: extracting the optimal rent when setting up a racket, weighting interests against default risk when starting a loan sharking business or organizing supply chains, logistics and distribution when setting up a drug dealing system. We address this question by comparing mobsters to a variety of samples drawn from the United States 1940 Population Census, including a sample of their closest (non-mobster) neighbors. We document that mobsters have one year less education than their neighbors on average. We find that mobsters have significant returns to education of 7.5–8.5% , which is only slightly smaller than their neighbors and 2–5 percentage points smaller than for U.S.-born men or male citizens. Mobster returns were consistently about twice as large as a sample of Italian immigrants or immigrants from all origin countries. Within that, those charged with complex crimes including embezzlement and bookmaking have the highest returns. We conclude that private returns to education exist even in the illegal activities characterized by a certain degree of complexity as in the case of organized crime in mid-twentieth century United States.

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5 Responses to “Some will rob you with a six-gun, and some with a fountain pen”

  1. honest Uncle Gangsta says:

    Hey, higher education itself is a great racket!

    And don’t firget to add in Tier 1 ORP retirement.

  2. Deplorable Duck says:

    Stringer Bell’s classwork in the TV series “The Wire” comes to mind.

    I’m surprised that the return on education isn’t higher for criminals vs ordinary citizens. The former can just take the classes that count, a la carte. An actual degree presumably has a lot less signaling value in the criminal world, so they can skip a couple of years of non-relevant BS classes.

  3. charlie says:

    Few months ago, my son and I went to visit my dad’s last remaining sibling. She’s a 95 year old retired nun living in the South Bay. She told us how my grandma was capable of buying a lot of L.A. real estate. They were bootleggers, with a homemade still in the basement of their Boyle Heights home.

    She filled in the blanks my dad conveniently ignored. He always talked about how he and the family were fruit pickers who had to work very hard for not much money. What she told us was that the family stole as much fruit as they picked for their hootch making operations. “Near 100% proof,” she told us proudly. BTW, my dad received his BS Accounting from UCLA when they had that program.

  4. Richard Bohloff says:

    Some may recall that former President Gottfredson was quite knowledgeable about crime.

  5. Dogmatic Ratios says:

    White collar crime and corporate crime are barely prosecuted.

    Almost all of our finest fine-paying executive criminals — in non-profits, in government, on wall street, in corporate suites — have completed advanced degrees. Higher education helps them to stay out of prison, but doesn’t seem to stop bad behavior. It may even encourage it. Research is required to answer that question.

    https://www.youtube.com/watch?v=F82mH1nfkxI

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