Labor Market Careers Before and after Incarceration

32 Pages Posted: 22 Nov 2014

See all articles by Janos Kollo

Janos Kollo

Hungarian Academy of Sciences (HAS) - Research Centre for Economic and Regional Studies (HAS); IZA Institute of Labor Economics

Bence Czafit

Budapest Institute of Economics

Abstract

We study the entry to formal employment and earnings of a large sample of convicts released from Hungarian prisons in 2002-2008. We identify the effect of the prison service on post-release careers by exploiting differences in the timing of incarceration, on the one hand, and estimating fixed effects models, on the other. For convicts with a single prison spell, we find initially negative effect on employment that turns positive after about one year while the impact on wages is permanently negative. A comparison with recidivists, for whom the employment effect is negative and the wage effect is weaker, suggests that these results are driven by a drop in the reservation wages of 'converted' criminals rather than the lack of discrimination. This reading is supported by further data showing that the ex-inmates, on average, make increased effort to find legitimate sources of living and support to finding jobs.

Keywords: incarceration, unemployment, wage loss, discrimination

JEL Classification: K42, J64, J39

Suggested Citation

Köllõ, János and Czafit, Bence, Labor Market Careers Before and after Incarceration. IZA Discussion Paper No. 8644, Available at SSRN: https://ssrn.com/abstract=2529353

János Köllõ (Contact Author)

Hungarian Academy of Sciences (HAS) - Research Centre for Economic and Regional Studies (HAS) ( email )

Labour Research Department
Budapest H-1112
Hungary
(36-1)309-2654 (Phone)
(36-1)319-3151 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Bence Czafit

Budapest Institute of Economics

Budapest
Hungary

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