The Social Costs of Mass Incarceration: A Labor Market Perspective David F. Weiman Alena Wels Hirschorn Professor of Economics Barnard College, Columbia University

Why the Labor Market? A Vicious Cycle The labor market-crime nexus Diminished labor market opportunities (low wages, higher turnover/unemployment) → More crime (typically the economic kind like drug trafficking) → Arrest, prosecution, conviction, and incarceration (especially under the regime of “mass” incarceration)

Why the Labor Market? A Vicious Cycle The prison-labor market nexus or the “prison effect” A prison record/experience → Stigma, depreciated human/social capital → Diminished labor market opportunities The Secondary Labor Market Hypothesis More crime (of the economic variety)

The Prison Effect: The Secondary Labor Market Hypothesis

The Prison Effect: The Demand Side Employer surveys in 1992-94 and 2001 Would you be willing to hire someone with a criminal/prison record? Results in 1992-94 60% responded “probably” or “absolutely” not Only 12.5% said they would In 2001 (at the end of the late 1990s boom), a more nuanced response:

% of Employers Willing to Hire Applicants with a Criminal Record 2001 5.3 15.7 24.1 36.4 18.5 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 Definitely Will Probably Will Probably Not Absolutely Not Depends on Crime

The Prison Effect: The Demand Side “Audit” studies of the Milwaukee area and NYC labor markets Profile of a “marginal” drug-using offender Race of the tester; geographical and sectoral location of employer Personal contact with hiring manager Outcome: callback to schedule an interview

The Demand for Released Prisoners in the Milwaukee Area: % Receiving Callbacks

The Prison Effect: Post-Release Labor Market Outcomes Bruce Western’s analysis tracks older adolescents through transition to adulthood Time period: 1980s to early 1990s Comparison of those with a prison record to those “at risk” of incarceration Employment, wages, earnings of released prisoners vs. others (as a %)

Estimates of Prison Effects for 30-Year Old Men by Race and Ethnicity

The Prison Effect: Post-Release Labor Market Outcomes Russell Sage Foundation “Mass Incarceration” Working Group Studies (Bushway, Stoll, and Weiman 2007) Released prisoners in California, Florida, Ohio, Washington Time period: 1990s to early 2000s Outcomes Post-release employment opportunities Relative to pre-incarceration experience

The Prison Effect: Post-Release Labor Market Outcomes Immediate but transitory post-release employment boon In Washington state case: Employment and earnings were 1/3 higher after release than before incarceration BUT employment-earnings returned to pre-prison levels within 1½-2 years Another view from Ohio:

Probabilities of Finding a Job for Ohio Prisoners Released in 1999 and 2000

The Prison Effect: Post-Release Labor Market Outcomes Why the boon? Two answers: Parole supervision enforcing the “employment” condition Work release programs that smooth post-release employment transition One other factor matters: local labor market conditions Probability of recidivism over time By “seriousness” of the offender

Reincarceration Risk of Parolees and the Marginal Impact of Labor Market Conditions

Some Conclusions Widening “mismatch” between skills-location of released prisoners and likely employers But more elastic demands in “tighter” labor markets Except for African American men “Guilty” until proven innocent by criminal background checks Racial disproportionality in enforcement → Racial profiling in the labor market

Some Conclusions “Sentencing Matters” but most relevant are Sentencing guidelines and mandatory minimum laws → mandatory prison spell/record Not “truth-in-sentencing” and “two or three strikes” laws → more prison time Labor market policies matter Targeted kind like work release programs Macroeconomic kind that fuel rapid employment growth and lower unemployment rates