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The High Budgetary Cost of Incarceration

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Author Info

  • John Schmitt
  • Kris Warner

Abstract

We use Bureau of Justice Statistics data to estimate that, in 2008, the United States had between 12 and 14 million ex-offenders of working age. Because a prison record or felony conviction greatly lowers ex-offenders’ prospects in the labor market, we estimate that this large population lowered the total male employment rate that year by 1.5 to 1.7 percentage points. In GDP terms, these reductions in employment cost the U.S. economy between $57 and $65 billion in lost output.

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Bibliographic Info

Paper provided by Center for Economic and Policy Research (CEPR) in its series CEPR Reports and Issue Briefs with number 2010-28.

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Length: 24 pages
Date of creation: Nov 2010
Date of revision:
Handle: RePEc:epo:papers:2010-28

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Keywords: incarceration; ex-offenders; ex-felons; employment; labor; economics; prisoners;

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References

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  1. Holzer, Harry J & Raphael, Steven & Stoll, Michael A, 2006. "Perceived Criminality, Criminal Background Checks, and the Racial Hiring Practices of Employers," Journal of Law and Economics, University of Chicago Press, vol. 49(2), pages 451-80, October.
  2. Harry J. Holzer & Steven Raphael & Michael A. Stoll, 2001. "Will Employers Hire Ex-Offenders? Employer Preferences, Background Checks, and Their Determinants," JCPR Working Papers 238, Northwestern University/University of Chicago Joint Center for Poverty Research.
  3. Holzer, Harry J., 2007. "Collateral Costs: The Effects of Incarceration on the Employment and Earnings of Young Workers," IZA Discussion Papers 3118, Institute for the Study of Labor (IZA).
  4. Richard B. Freeman, 1991. "Crime and the Employment of Disadvantaged Youths," NBER Working Papers 3875, National Bureau of Economic Research, Inc.
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Cited by:
  1. Baumann, Florian & Friehe, Tim, 2013. "Cheap talk about the detection probability," DICE Discussion Papers 90, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  2. John Schmitt & Janelle Jones, 2012. "Long-term Hardship in the Labor Market," CEPR Reports and Issue Briefs 2012-09, Center for Economic and Policy Research (CEPR).

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