Work and Opportunity Before and After Incarceration

“[This paper] examine[s] the labor market outcomes and economic characteristics of the incarcerated population using data maintained by the Internal Revenue Service (IRS) in an effort to improve tax policies to aid the re-integration of ex-prisoners. Starting in 2012, the Federal Bureau of Prisons and the heads of State prison agencies were required to submit identifying information and incarceration dates annually to the IRS to facilitate tax audits. The resulting sample of about 2.9 million individuals…represents the only national census of administrative prisoner records. [The authors] match these data to earnings and tax filing records from 1999 to 2014, providing information on pre-and post-incarceration employment, earnings, and certain demographic information. For 497,000 incarcerated individuals born in 1980-1986, [the authors] also identify their childhood neighborhood and parent’s income and marital status” (p.1).

 

“These data provide several advantages over that used in prior research. They include the entire incarcerated population and all individuals released during the period, linked to pre- and post- incarceration earnings, income, and some demographic information….This allows [the authors] to characterize the role of pre-incarceration conditions, such as family structure and income, on the likelihood of incarceration” (p.5).

 

“[Past r]esearch suggests the mark of a criminal record imposes impediments to employment, exacerbating economic disparities and contributing to recidivism...Based in part on the belief that successful reintegration requires employment and economic opportunities in the formal workplace, the tax code provides subsidies for employers that hire ex-felons. The tax code also provides broad-based incentives intended to encourage economic opportunity and formal employment that may benefit ex-prisoners, including the earned income tax credit (EITC) and place-based subsidies for dis-advantaged neighborhoods, like Empowerment Zones” (p.1).

 

“[The authors] discuss the implications of…the design of policies intended to encourage employment and rehabilitation of individuals with a criminal record” (p.ii).

 

(Abstractor: Author and Website Staff)

“The data show that ex-prisoners struggle in the labor market after their period of incarceration. In the first full calendar year after their release, only 55 percent have any reported earnings. Among those with jobs, their median annual earnings is $10,090 and only 20 percent earn more than $15,000 that year—an amount roughly equivalent to the earnings of a full-time worker at the federal minimum wage. Overall, the outcomes of ex-prisoners are poor despite the fact that the vast majority appear eligible for tax incentives that promote employment for low-income workers, including provisions that specifically target ex-felons. The struggles of ex-prisoners after leaving prison are mirrored by their struggles prior to being incarcerated. Three years prior to incarceration, only 49 percent of prime-age men are employed, and, when employed, their median earnings were only $6,250. Only 13 percent earned more than $15,000” (p.1). “The fact that the average labor market outcomes of the incarcerated population are similarly poor before and after incarceration suggests that pre-existing barriers to employment, like poor labor market skills or prejudices, make it difficult to find work and raise the likelihood of incarceration” (p.11). “Neighborhoods and social inclusion matter to incarceration and labor market outcomes. Prisoners are also disproportionately likely to have grown up in socially isolated and segregated neighborhoods with high rates of child poverty and in predominantly African American or American Indian neighborhoods” (p.14). “To help combat recidivism and aid the reintegration of ex-prisoners into society, the tax code provides incentives for employers who hire ex-prisoners and provisions to encourage employment among lower-in-come families and individuals. Though use of the EITC among ex-prisoners without children increases in the years after incarceration, take-up of the EITC and of the WOTC [Work Opportunity Tax Credit] is low….Relaxing the burdensome requirements needed to target subsidies to ex-felons or replacing focused subsidies—like the WOTC—with broad-based subsidies for low-skill, marginally employed individuals—like a larger EITC for childless workers—could have the advantage of expanding eligibility for subsidies but reaching the same intended recipients” (p.19). (Abstractor: Author)

• Last Updated:
• Created:
• Resource Publication Date: 2018
• Author(s): Looney, Adam and Turner, Nicholas.
• Organizational Author(s): The Brookings Institution
• Funding Source: Funding source not identified
• Resource Availability: Publicly available
• Posted by: Wesley Peterson
• Posted in: Workforce System Strategies