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Labor Market Careers Before and After Incarceration

Author

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  • Köllő, János

    (Institute of Economics, Budapest)

  • Czafit, Bence

    (Budapest Institute)

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.

Suggested Citation

  • Köllő, János & Czafit, Bence, 2014. "Labor Market Careers Before and After Incarceration," IZA Discussion Papers 8644, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8644
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    References listed on IDEAS

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    1. Torbjørn Skardhamar & Kjetil Telle, 2009. "Life after prison The relationship between employment and re-incarceration," Discussion Papers 597, Statistics Norway, Research Department.
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    More about this item

    Keywords

    wage loss; unemployment; incarceration; discrimination;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J39 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Other

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