Labor Market Careers before and after Incarceration

János Kollo () and Bence Czafit ()
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János Kollo: Institute of Economics, Center for Economic and Regional Studies, Hungarian Academy of Sciences
Bence Czafit: Budapest Institute for Policy Analysis

No 1408, Budapest Working Papers on the Labour Market from Institute of Economics, Centre for Economic and Regional Studies

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 (search for similar items in EconPapers)
JEL-codes: J39 J64 K42 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2014-11
New Economics Papers: this item is included in nep-lab, nep-law and nep-lma
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