From Prison to Entrepreneurship: Can Entrepreneurship be a Reentry Strategy for Justice-Impacted Individuals?

AuthorKylie Jiwon Hwang
Published date01 May 2022
Date01 May 2022
Subject MatterImproving Human Capital and Labor Market Opportunities
114 ANNALS, AAPSS, 701, May 2022
DOI: 10.1177/00027162221115378
From Prison
to Entre pre-
neurship: Can
Entre pre neurship
be a Reentry
Strategy for
Justice-impacted people face significant obstacles to
employment. This article explores an alternative path-
way for these individuals to find work and income:
entrepreneurship. While anecdotal evidence suggests
that entrepreneurship is common among people with
criminal histories, it remains both theoretically and
empirically underexamined. I conduct a synthesis of
recent research to assess the viability of entrepreneur-
ship as a path to reintegration for returning citizens. I
highlight findings on the prevalence of entrepreneurial
entry, the underlying mechanism behind entrepreneur-
ship, the economic and social consequences of entre-
preneurship, and the barriers and challenges that
reentering entrepreneurs face. Finally, I draw attention
to key policy implications and suggest new initiatives
that can help enhance the viability of entrepreneurship
as a reentry strategy for justice-involved individuals.
Keywords: entrepreneurship; justice-impacted indi-
viduals; labor market discrimination; pol-
icy implications
Individuals with criminal records face significant
obstacles to employment in the United States
(Pager 2003; Pettit and Western 2004; Holzer,
Raphael, and Stoll 2003). These employment
barriers lead to unsuccessful reentry for return-
ing citizens, as well as persistent economic and
social inequality (Western 2002; Uggen 1999).
As a response to such negative consequences,
scholars and policy-makers have focused on
Kylie Jiwon Hwang is a postdoctoral scholar at Stanford
Graduate School of Business. She will be joining the
Kellogg School of Management at Northwestern
University as an assistant professor in July 2023. She
received her PhD in management from Columbia
Business School. Her research lies in the intersection of
entrepreneurship, incarceration, and discrimination.
Her dissertation focused on entrepreneurship as a way
to overcome labor market discrimination for formerly
incarcerated individuals in the United States.
improving the opportunities in wage employment for returning citizens. Yet
employment is only one of the channels through which justice-impacted people
find work and income. Anecdotal evidence and recent media reports suggest that
justice-involved individuals exhibit a keen interest in an alternative pathway to
reentry: entrepreneurship. While nascent research suggests that launching one’s
independent business is a common route for people with criminal histories, it
remains both theoretically and empirically underexamined as a strategy to achieve
successful reentry and economic and social mobility.
This article conducts a synthesis of the burgeoning literature to assess the
viability of entrepreneurship as an alternative to wage employment for returning
citizens. The key questions addressed are as follows: Is entrepreneurship preva-
lent among individuals with criminal records? Why do returning citizens pursue
entrepreneurship? What are the short- and long-term economic and social con-
sequences of entrepreneurship for justice-involved individuals? Do returning
citizens face barriers and challenges to entrepreneurship? Finally, what are the
potential policy reforms and initiatives to support and facilitate entrepreneurship
among the justice-involved population?
I first illustrate the prevalence of entrepreneurship as a labor market choice
made by returning citizens. Recent research has established that justice-impacted
individuals pursue entrepreneurship at high rates, particularly higher than that of
similar non-justice-impacted individuals (e.g., Hwang and Phillips 2020; Bushway
etal. 2021; Finlay, Mueller-Smith, and Street 2022). To further explain this trend,
I explore the underlying mechanisms driving individuals with criminal histories
into entrepreneurship. Evidence suggests that entrepreneurship in this popula-
tion owes not only to individual-level factors—like risk preferences and disposi-
tions (Fairlie 2002; Gottschalk 2009)—but also structural factors that stem from
barriers to employment (Hwang and Phillips 2020).
Given the prevalence of entrepreneurship as a career choice for returning citi-
zens, this article investigates the characteristic outcomes of entrepreneurship
among returning citizens. Both quantitative and qualitative work documents that
entrepreneurship helps mitigate the income gap (Hwang and Phillips 2020) and
boost long-term economic mobility (Hwang 2021b), as well as reduce recidivism
(Sonfield 2013; Cooney 2012; Hwang and Phillips 2020), in comparison to wage-
employment and unemployment. While such positive outcomes from entrepre-
neurship establish the benefits of launching one’s own business for returning
citizens, the process to building and sustaining a successful business is freighted
with challenges and barriers. I proceed to explore the challenges that impede
successful entrepreneurial entry for the justice-involved people, charting barriers
to financial, human, and social capital.
Finally, having analyzed entrepreneurship’s drivers, outcomes, and barriers
among returning citizens, I discuss how such evidence can inform policy that is
NOTE: This research is generously supported by the Ewing Marion Kauffman Foundation,
REFORM Alliance, and Columbia Justice Lab at Columbia University. The author thanks
Bruce Western, David Harding, and Jasmin Sandelson for their comments and suggestions.
The contents of this article are solely the responsibility of the author.

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