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

2. 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)

3. 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)

4. The Prison Effect: The Secondary Labor Market Hypothesis

5. The Prison Effect: The Demand Side
Employer surveys in and 2001
Would you be willing to hire someone with a criminal/prison record?
Results in
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:

6. % 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

7. 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

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

9. 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 %)

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

11. 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

12. 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:

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

14. 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

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

16. 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

17. 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