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The Minimum Wage, EITC, and Criminal Recidivism

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  • Amanda Y. Agan
  • Michael D. Makowsky

Abstract

For released prisoners, the minimum wage and earned income tax credits (EITCs) can influence their ability to find employment and their potential wages relative to illegal sources of income, affecting the probability they are reincarcerated. Using administrative prison release records we identify the effects of state variation in minimum wages and EITC policies on recidivism. We find that a minimum wage increase of $0.50 reduces the probability an individual returns to prison within three years by 2.15 percent; these reductions come mainly from returns for property and drug crimes. The availability of state EITCs also reduces recidivism, but only for women.

Suggested Citation

  • Amanda Y. Agan & Michael D. Makowsky, 2023. "The Minimum Wage, EITC, and Criminal Recidivism," Journal of Human Resources, University of Wisconsin Press, vol. 58(5), pages 1712-1751.
    • Handle: RePEc:uwp:jhriss:v:58:y:2023:i:5:p:1712-1751
    Note: DOI: https://doi.org/10.3368/jhr.58.5.1220-11398R1
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    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

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