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Labor Market Careers before and after Incarceration

Author

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  • János Kollo

    (Institute of Economics, Center for Economic and Regional Studies, Hungarian Academy of Sciences)

  • Bence Czafit

    (Budapest Institute for Policy Analysis)

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

  • János Kollo & Bence Czafit, 2014. "Labor Market Careers before and after Incarceration," Budapest Working Papers on the Labour Market 1408, Institute of Economics, Centre for Economic and Regional Studies.
    • Handle: RePEc:has:bworkp:1408
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    References listed on IDEAS

    as
    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

    incarceration; unemployment; wage loss; 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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