The Effects of Time in Prison on Male Felons’ Employment and Earnings

1. The Effects of Time in Prison on Male Felons’ Employment and Earnings Haeil Jung University of Chicago 2007 Crime and Population Dynamics Summer Workshop June 4th 2007

2. Research Question • Doesincarceration affect male felons’ employment outcomes? • Effects can be ambiguous. • Reduction of social and economic assets • Effects can be positive. • “Scared straight”: Katz, Levitt and Shustorovich (2003). • Increasing punishment for repeat offenders • Effects can be negative. • Deterioration of legal skills • Improvement of illegal skills • Stigma of incarceration

3. Main Findings • The length of incarceration has a positive relationship with subsequent employment and earnings

4. Matched Administration Data • Sample 35,954 men • Paroled to Cook County, Illinois • January 1995 - June 2003 • Age 18 to 64 • Before and after their first incarceration • Matched administrative records: • Illinois Department of Correction (IDOC) • Admission and exit dates, offenses, some demographics • No Jail Data available • Illinois Department of Employment Security (IDES). • Quarterly earnings histories in UI-covered jobs in Illinois. • Main individual time-varying variables • Quarterly Employment and Earnings • Age • Timing of prison entry and exit

5. Characteristics of Parolees to Cook County • Less than 12 years of schooling: ~ 59% • Black: ~ 76% • Average Release–Age: ~ 30 • Quarterly Employment Rate: ~26% • Quarterly Earnings: ~$1,000 • Quarterly Earnings When Working: ~$3,000

6. Offense Types and Incarceration Length

12. Dynamic Aspects of Employment and Earnings of Felons • Increase of earnings when working during the post-incarceration period • Decrease of employment during the post-incarceration period • Longer incarceration is associated with higher earnings and employment rate • Problem with interpreting longitudinal pattern • Macroeconomic and policy changes • Cohort effect • Interaction between Time and Individual Characteristics

13. Statistical Model: Fixed Effects Regression with Huber-White Robust Variance-Covariance Estimation

14. Real Quarterly Earnings *Significant at the 5% level

15. Employment *Significant at the 5% level

16. Log of Real Quarterly Earnings *Significant at the 5% level

17. Findings • Incarceration length • A positive relationship with employment and earnings • During 2 years right after incarceration, on average one to two years of incarceration compared to less than a half year of incarceration is associated with • ~ $260 more earnings per quarter, • ~ 6 percentage point higher employment and • ~ 19 percentage point more earnings when working.

18. Thank You.

19. “Being in Prison Effect” vs “Time in Prison Effect” Earnings Time in Prison

20. Will labor Market consequences in informal sector be different? Earnings Formal Sector Informal Sector Time in Prison

21. Distribution of Incarceration Length across Different Offense Categories of Felons

22. Offense Types *This count excludes first degree murder convictions.

23. Outcome Variables

24. Real Quarterly Earnings *Significant at the 5% level

25. Employment *Significant at the 5% level

26. Log of Real Quarterly Earnings *Significant at the 5% level

27. Findings • Incarceration length • A decreasing positive relationship with employment and earnings • During 2 years right after incarceration, on average two years of incarceration compared with one year of incarceration is associated with • $147 more earnings per quarter, • 3 percentage point higher employment and • 13 percentage point more earnings when working

28. Statistical Model: Fixed Effects Regression with Huber-White Robust Variance-Covariance Estimation