Incarceration Length, Employment, and Earnings

Abstract

Incarceration directly affects a significant and increasing share of Americans, and the lengths of new incarceration spells have increased dramatically in the past twenty years. Employment in the legitimate, mainstream economy is a key factor in the reintegration of former inmates into society after release. While considerable literature documents large adverse labor market consequences of going to prison, this paper provides the first evidence focusing directly on the effects of increases in incarceration length on the employment and earnings prospects of individuals after their release from prison. Data on inmates are from the state system in Florida and the federal system in California, linked to administrative records of quarterly earnings. This paper utilizes a variety of research designs in an attempt to identify the causal effects of increases in incarceration length: controlling for observable factors, accounting for pre-spell differences in outcomes, and using instrumental variables for incarceration length based on randomly assigned judges with different sentencing propensities. The results show no consistent evidence of adverse labor market consequences of longer incarceration length using any of the analytical methods in either the state or federal data.