Returns to Education in Criminal Organizations: Did Going to College Help Michael Corleone?

47 Pages Posted: 1 Mar 2016  

Nadia Campaniello

University of Essex

Rowena Gray

University of California, Merced - School of Social Sciences, Humanities and Arts

Giovanni Mastrobuoni

University of Essex - Department of Economics; IZA; Collegio Carlo Alberto

Date Written: February 29, 2016

Abstract

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 percent, 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.

Keywords: Returns to education; organized crime; mafia; Italian-American Immigration; Federal Bureau of Narcotics; 1940 Census

JEL Classification: I26; N32; K42; Z13

Suggested Citation

Campaniello, Nadia and Gray, Rowena and Mastrobuoni, Giovanni, Returns to Education in Criminal Organizations: Did Going to College Help Michael Corleone? (February 29, 2016). Available at SSRN: https://ssrn.com/abstract=2740211 or http://dx.doi.org/10.2139/ssrn.2740211

Nadia Campaniello

University of Essex ( email )

Wivenhoe Park
Colchester, Turin - Piedmont CO43SQ
United Kingdom

Rowena Gray

University of California, Merced - School of Social Sciences, Humanities and Arts ( email )

P.O. Box 2039
Merced, CA 95344
United States

Giovanni Mastrobuoni (Contact Author)

Collegio Carlo Alberto ( email )

via Real Collegio 30
Moncalieri, Torino 10024
Italy

University of Essex - Department of Economics ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

IZA ( email )

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