Working Paper: NBER ID: w18437
Authors: William N. Evans; Craig Garthwaite; Timothy J. Moore
Abstract: We propose the rise of crack cocaine markets as an explanation for the end to the convergence in black-white educational outcomes beginning in the mid-1980s. After constructing a measure to date the arrival of crack markets in cities and states, we show large increases in murder and incarceration rates after these dates. Black high school graduation rates also decline, and we estimate that crack markets accounts for between 40 and 73 percent of the fall in black male high school graduation rates. We argue that the primary mechanism is reduced educational investments in response to decreased returns to schooling.
Keywords: Crack Cocaine; Educational Outcomes; Black-White Gap; Murder Rates; Incarceration Rates
JEL Codes: I20; I21; I28; J01; J11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Emergence of crack cocaine markets (D40) | Decline in black male high school graduation rates (I21) |
| Emergence of crack cocaine markets (D40) | Increase in murder rates (K42) |
| Increased mortality and incarceration risks (I12) | Reduced educational investments (I21) |
| Intensity of crack markets (K42) | Changes in graduation rates (I21) |
| Emergence of crack cocaine markets (D40) | Decline in black male high school graduation rates two years post-introduction (I21) |