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.