How Do Firms Deal with the Risks of Employing Ex-prisoners?

János Köllő (), István Boza, Virág Ilyés (), Zsófia Kőműves and Lili Márk
Additional contact information
János Köllő: Institute of Economics, Budapest
Zsófia Kőműves: Cambridge Economic Policy Associates

No 16645, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We use linked employer-employee data to investigate a large sample of past and future prisoners in Hungary, 2003-2011. We first compare their jobs, focusing on attributes that can reduce the penalty the employer must pay for a mistaken hiring decision. Second, we study if employers insure themselves by paying lower wages to ex-prisoners. Third, we analyze whether the probability of the match dissolving within a few months is lower if the firm could potentially base its hiring decision on referrals. The composition of former prisoners' employment is biased toward easy-to-cancel jobs. In the unskilled jobs held by most of them, they do not earn less than future convicts, but a minority in white-collar positions are paid significantly less. Ex-prisoners' jobs are less likely to dissolve quickly if the hiring firm potentially had access to co-worker, employer, or labor office referrals.

Keywords: incarceration; reintegration; mobility; discrimination; Hungary (search for similar items in EconPapers)
JEL-codes: J23 J63 J71 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2023-12
New Economics Papers: this item is included in nep-eur, nep-hrm, nep-lma and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://docs.iza.org/dp16645.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp16645

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().