Employment and wages before and after incarceration – evidence from Hungary
Bence Czafit () and
János Köllő ()
IZA Journal of European Labor Studies, 2015, vol. 4, issue 1, 1-21
We study the entry into legitimate employment and earnings of a large sample of convicts released from Hungarian prisons in 2002–08. The employment rate of the prisoners falls short of 20% one year before incarceration, and they earn 25% below the national average. We identify the effect of prison by exploiting differences in the timing of incarceration and also by estimating fixed-effect models. For convicts with a single prison term, we find an initially negative effect on employment, which turns positive after a year, though the impact on earnings is permanently negative. A comparison with recidivists suggests that these results are driven by a drop in the reservation wages of ‘reformed’ criminals. This reading is supported by further data showing that the average ex-inmate tends to make increased efforts to find a legitimate source of livelihood and support in job search. Copyright Czafit and Köllő. 2015
Keywords: Incarceration; Prison effects; Unemployment; Wage loss; Discrimination; K42; J64; J39 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:spr:izaels:v:4:y:2015:i:1:p:1-21:10.1186/s40174-015-0044-z
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