Incarceration, Recidivism, and Employment

82 Pages Posted: 12 Jul 2018

See all articles by Manudeep Bhuller

Manudeep Bhuller

University of Oslo - Department of Economics; Statistics Norway

Gordon B. Dahl

UC San Diego - Department of Economics; National Bureau of Economic Research (NBER); University of Rochester - Department of Economics

Katrine Vellesen Løken

Norwegian School of Economics (NHH) - Department of Economics

Magne Mogstad

Statistics Norway; IZA Institute of Labor Economics

Multiple version iconThere are 4 versions of this paper

Date Written: June 17, 2018

Abstract

Understanding whether, and in what situations, time spent in prison is criminogenic or preventive has proven challenging due to data availability and correlated unobservables. This paper overcomes these challenges in the context of Norway’s criminal justice system, offering new insights into how incarceration affects subsequent crime and employment. We construct a panel dataset containing the criminal behavior and labor market outcomes of the entire population, and exploit the random assignment of criminal cases to judges who differ ystematically in their stringency in sentencing defendants to prison. Using judge stringency as an instrumental variable, we find that imprisonment discourages further criminal behavior, and that the reduction extends beyond incapacitation. Incarceration decreases the probability an individual will reoffend within 5 years by 29 percentage points, and reduces the number of offenses over this same period by 11 criminal charges. In comparison, OLS shows positive associations between incarceration and subsequent criminal behavior. This Sharp contrast suggests the high rates of recidivism among ex-convicts is due to selection, and not a consequence of the experience of being in prison. Exploring factors that may explain the preventive effect of incarceration, we find the decline in crime is driven by individuals who were not working prior to incarceration. Among these individuals, imprisonment increases participation in programs directed at improving employability and reducing recidivism, and ultimately, raises employment and earnings while discouraging further criminal behavior. For previously employed individuals, while there is no effect on recidivism, there is a lasting negative effect on employment. Contrary to the widely embraced ‘nothing works’ doctrine, these findings demonstrate that time spent in prison with a focus on rehabilitation can indeed be preventive for a large segment of the criminal population.

Keywords: Crime, employment, incarceration, recidivism

JEL Classification: K42, J24

Suggested Citation

Bhuller, Manudeep and Dahl, Gordon B. and Løken, Katrine Vellesen and Mogstad, Magne, Incarceration, Recidivism, and Employment (June 17, 2018). NHH Dept. of Economics Discussion Paper No. 14/2018. Available at SSRN: https://ssrn.com/abstract=3205006 or http://dx.doi.org/10.2139/ssrn.3205006

Manudeep Bhuller

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway

HOME PAGE: http://sites.google.com/site/manudeepbhuller

Statistics Norway ( email )

N-0033 Oslo
Norway

HOME PAGE: http://sites.google.com/site/manudeepbhuller

Gordon B. Dahl

UC San Diego - Department of Economics ( email )

9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0112
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Rochester - Department of Economics ( email )

Harkness Hall
Rochester, NY 14627
United States

Katrine Vellesen Løken (Contact Author)

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway

Magne Mogstad

Statistics Norway ( email )

N-0033 Oslo
Norway

IZA Institute of Labor Economics

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

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