Labor Market Careers Before and After Incarceration

János Köllő () and Bence Czafit
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János Köllő: Institute of Economics, Budapest
Bence Czafit: Budapest Institute

No 8644, IZA Discussion Papers from Institute of Labor Economics (IZA)

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: wage loss; unemployment; incarceration; discrimination (search for similar items in EconPapers)
JEL-codes: J39 J64 K42 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2014-11
New Economics Papers: this item is included in nep-lab and nep-law
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Published - published as 'Employment and wages before and after incarceration - evidence from Hungary' in: IZA Journal of European Labor Studies. 2015, 4:21

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