We analyze a unique data set detailing the financial activities of a drug-selling street gang on a monthly basis over a four-year period in the recent past. The data, originally compiled by the gang leader to aid in managing the organization, contain detailed information on both the sources of revenues (e.g. drug sales, extortion) and expenditures (e.g costs of drugs sold, weapons, tribute to the central gang organization, wages paid to various levels of the gang). Street-level drug dealing appears to be less lucrative than is generally thought. We estimate the average wage in the organization to rise from roughly $6 per hour to $11 per hour over the time period studied. The distribution of wages, however, is extremely skewed. Gang leaders earn far more than they could in the legitimate sector, but the actual street-level dealers appear to earn less than the minimum wage throughout most of our sample, in spite of the substantial risks associated with such activities (the annual violent death rate in our sample is 0.07). There is some evidence consistent both with compensating differentials and efficiency wages. The markup on drugs suggests that the gang has substantial local market power. Gang wars appear to have an important strategic component: violence on another gang’s turf shifts demand away from that area. The gang we observe responds to such attacks by pricing below marginal cost, suggesting

The author(s) shown below used Federal funds provided by the U.S. Department of Justice and prepared the following final report: Document Title:

The millennium marks the beginning of a second century for the formal system of juvenile justice in the United States. From its inception, the central focus of the system has been delinquency, an amorphous construct that includes not only “criminal ” behavior but also an array of youthful actions that offend prevailing social mores. Thus, the meaning of delinquency is markedly time dependent. Likewise, methods for addressing the phenomenon have reflected the vagaries of social constructions of youth and youth deviance. American juvenile justice was founded on internally conflicting value systems: the diminished responsibility and heightened malleability of youths versus individual culpability and social control of protocriminality. During its first century, the latter generally have become increasingly predominant over the former. Those most caught up in the system, however, have remained overwhelmingly our most marginalized youths, from immigrants ’ offspring in the early 20th century to children of color in contemporary society. The implications of such theoretical and sociodemographic variations are considered, and their implications are reviewed for public policy beyond mere political symbolism. A B

Special thanks to Patricia Holborn, who has read this manuscript more than once, and improved it every time. Thanks also to Seth Klein and Marc Lee of the CCPA and to reviewers Robert Allen, Clyde Hertzman and Jeff Sommers for their patient attention to detail. This complex analysis would have been impossible without long conversations with generous colleagues in many fields of specialization. My colleague Joan Wolfe made the computer work when nobody else could. I am sure there is a special place in heaven for such people. Thanks to Shannon Daub for editing and laying out this paper.

The author(s) shown below used Federal funds provided by the U.S. Department of Justice and prepared the following final report: