Entrepreneurship as a Response to Labor Market Discrimination for Formerly Incarcerated People

Posted: 20 May 2020

See all articles by Kylie Jiwon Hwang

Kylie Jiwon Hwang

Columbia Business School - Management

Damon J. Phillips

Columbia Business School - Management

Date Written: March 6, 2020

Abstract

This paper examines entrepreneurship as a way to overcome labor market discrimination. Specifically, we examine entrepreneurship as a career choice for formerly incarcerated individuals, a group of individuals who face substantial discrimination in the labor market. Using the United States National Longitudinal Survey of Youth 1997 data, we find that formerly incarcerated people are more likely to become entrepreneurs compared to individuals without a criminal record. We take advantage of an exogenous state and county level policy shock “Ban-the-Box” in the United States to further disentangle the underlying mechanism of how labor market discrimination affects formerly incarcerated individuals in their entrepreneurial choices. The findings suggest that entrepreneurship is a viable alternative career choice for formerly incarcerated people, yielding both higher income and lower recidivism rates. In addition to reporting robustness checks and addressing alternative explanations, we discuss theoretical, empirical, and policy implications.

Keywords: Entrepreneurship, Incarceration, Labor Market Discrimination

Suggested Citation

Hwang, Kylie and Phillips, Damon J., Entrepreneurship as a Response to Labor Market Discrimination for Formerly Incarcerated People (March 6, 2020). Available at SSRN: https://ssrn.com/abstract=3563421

Kylie Hwang (Contact Author)

Columbia Business School - Management ( email )

3022 Broadway
New York, NY 10027
United States

Damon J. Phillips

Columbia Business School - Management ( email )

3022 Broadway
New York, NY 10027
United States

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