Ex-Convicts Face Multiple Labor Market Punishments: Estimates of Peer-Group and Stigma Effects Using Equations of Returns to Schooling
17 Pages Posted: 11 Jan 2005
Date Written: December 2004
We produced a data set from a survey of a population of convicts in probation. We combined this new data set with an official data set from the Brazilian government to study labor market discrimination faced by ex-convicts. We were interested in estimating two potential effects of discrimination, statistical (stigma) and behavioral (peer-group) effects. Our econometric results suggest that stigmatization leads to a 39% reduction in the wage earned by ex-convicts relative to the wage earned by non-convicts. They also suggest that the peer-group effect accounts for a reduction in the relative earnings of ex-convicts of 1.1% per year of study. In addition, we also show that ex-convicts earn 3.1% less per year of experience than non-convicts.
Keywords: Stigma effect, peer effect, crime rate, returns to schooling, wage discrimination
JEL Classification: C31, J71, K49
Suggested Citation: Suggested Citation