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Employment and wages before and after incarceration – evidence from Hungary

Employment and wages before and after incarceration – evidence from Hungary 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png IZA Journal of European Labor Studies Springer Journals

Employment and wages before and after incarceration – evidence from Hungary

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References (54)

Publisher
Springer Journals
Copyright
Copyright © 2015 by Czafit and Köllő.
Subject
Economics; Labor Economics; Population Economics
eISSN
2193-9012
DOI
10.1186/s40174-015-0044-z
Publisher site
See Article on Publisher Site

Abstract

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.

Journal

IZA Journal of European Labor Studies – Springer Journals

Published: Oct 28, 2015

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