Getting By: Low Wages and Income Supplementation

Abstract

We examine income-generating strategies of “getting by” in a sample of young adults who have an offending record. First, we examine if human capital, conventional social capital, and criminal social capital are associated with decisions to supplement legal income with income from informal or illegal activities. Second, we explore which of those factors differentiate supplementing with informal activities from supplementing with illicit activities. Random effects linear probability models are used to analyze a subsample of the Pathways to Desistance Study, a longitudinal data set of adolescents who have begun the transition to adulthood. We find that, among individuals in low-wage jobs, neither conventional social capital nor conventional human capital was related to supplementing legal work with informal work. Criminal social capital and low legal wages in the prior year increased the probability of supplementing legal work with illicit income-generating activities. The current study corroborates previous findings that many individuals are engaged in various income-generating activities. Different mechanisms are associated with decisions to supplement licit work with informal work as opposed to supplementing licit work with income-generating crime.

Crime, Consumption, and Choice: On the Interchangeability of Licit and Illicit Income

“…Our conclusions regarding the offender perceptions of the fungibility of different sources of income are based on the underlying assumption that individuals are most often involved in multiple income-generating activities, either consecutively or concurrently. That is, it is not uncommon for individuals who have low-wage jobs to engage in multiple forms of incomegenerating activities, including informal and illegal activities (Crutchfield 2014;Nur and Nguyen 2022). Fagan and Freeman (1999) argued that legal and illegal income-generating activities exist on a continuum, with many individuals "doubling up" by participating in multiple income-generating activities simultaneously.…”

“…That is, relative deprivation may raise their minimum required spending on conspicuous goods, such as entertainment, eating out, clothing, or luxury items. Research suggests that some individuals who are socioeconomically disadvantaged and who have low human capital invest in relatively high levels of conspicuous consumption because they lack other signals or recognition of other accomplishments (Moav and Neeman 2012; Ordabayeva and Chandon 2011). Moav and Neeman (2012) argue that conspicuous consumption can suppress upward mobility and prevent the poor from escaping a poverty trap.…”

Crime, Consumption, and Choice: On the Interchangeability of Licit and Illicit Income

“…Our conclusions regarding the offender perceptions of the fungibility of different sources of income are based on the underlying assumption that individuals are most often involved in multiple income-generating activities, either consecutively or concurrently. That is, it is not uncommon for individuals who have low-wage jobs to engage in multiple forms of income-generating activities, including informal and illegal activities (Crutchfield 2014;Nur and Nguyen 2022). Fagan and Freeman (1999) argued that legal and illegal income-generating activities exist on a continuum, with many individuals "doubling up" by participating in multiple incomegenerating activities simultaneously.…”