PRE-IMPRISONMENT EMPLOYMENT DROPS: ANOTHER INSTANCE OF THE ASHENFELTER DIP?

Author:Loeffler, Charles E.
Position:Special Issue on Bail and Pretrial Detention
 
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TABLE OF CONTENTS INTRODUCTION 816 I. THE ECONOMIC SITUATION OF THE IMPRISONED 819 II. DATA AND METHODS 824 III. RESULTS 828 IV. DISCUSSION 830 INTRODUCTION

In recent years, researchers and policymakers have increasingly focused their attention on the employment challenges facing former prisoners. (2) This heightened interest has been driven by the recognition that ex-prisoners face numerous barriers to employment (3) and by the hope that increasing employment among ex-prisoners could reduce their persistently high rates of criminal recidivism. (4) Underpinning this policy perspective have been numerous studies estimating the impact that imprisonment has on the post-release labor market status and performance of ex-prisoners. (5) In general, these studies have reported substantial long-term declines in employment and wages for the formerly imprisoned--declines that have been linked to changes in prisoner human capital, social capital, and social stigma. (6)

Intriguingly, a number of these studies have also reported substantial employment drops among prisoners prior to imprisonment. (7) This unexpected finding raises the possibility that prisoners might be experiencing pre-imprisonment labor market difficulties of a kind similar to those observed among participants in studies of job-training programs. (8) In those studies, job-training program participants were found to have lower pre-program earnings as a result of employment difficulties that subsequently caused them to enter job-training programs. (9) If the imprisoned were found to be affected by a similar positive selection process, then it would suggest that even soon-to-be prisoners, with their often lengthy prior criminal records, were still sensitive to changes in their labor market status. (10) Such a finding would lend support for classic sociological theories and more recent economic interpretations of criminal behavior, both of which predict that an individual's decision to offend is influenced by their economic position and the unavailability of better economic alternatives." This finding is especially intriguing as the imprisoned have generally been thought to be less sensitive to changes in their labor market status due to their more substantial prior criminal involvement and disengagement from the formal labor market. (12) On the other hand, if labor market participation prior to imprisonment were found to be uncorrelated with participation in criminal activities, then there must be another explanation for the observed employment losses prior to imprisonment. (13) In this Article, I argue for such an alternative explanation. Specifically, that much of the pre-imprisonment employment losses observed among the soon-to-be imprisoned can be explained by mechanical disruption of formal labor market activity as a result of routine pre-imprisonment criminal case processing, especially pretrial incarceration. While this finding is of intrinsic interest in its own right, reinforcing the importance of scrutinizing the labor market consequences of pretrial incarceration, (14) it also has important implications for the estimation of imprisonment effects. Researchers often rely on data from the months prior to imprisonment to form the counterfactual condition for a within-person causal estimate of the effects of imprisonment. (15) However, the cooccurrence of pretrial incarceration and imprisonment suggests that this approach may not produce an isolated estimate of the effects of imprisonment, but instead a compound estimate of the joint effects of pretrial incarceration, conviction, and imprisonment if an insufficient lag structure is employed.

The remainder of the paper is divided into four sections. Section I describes past research on the economic lives of the imprisoned. Section II describes the analytical strategy and data used in this study. Section III reports results. And Section IV concludes with a discussion of the implications of the reported findings.

  1. THE ECONOMIC SITUATION OF THE IMPRISONED

    Both before and after their incarceration, the imprisoned have consistently been observed to have extremely low levels of employment and very low wages while employed. (16) The Bureau of Justice Statistics reported that prior to their incarceration, U.S. prisoners in 1997 were between two and three times as likely to be unemployed as the general population. (17) More recent studies of prisoners from Florida, Ohio, and Washington State have reported pre-imprisonment unemployment rates ranging from 50% to 74%. (18) These exceedingly high levels of pre-imprisonment unemployment are followed by similar or even higher levels of long-term post-imprisonment unemployment, suggesting that the majority of prisoners are chronically unemployed both before and after their imprisonment. (19) This dismal reality has generated considerable interest among researchers intent on understanding how imprisonment contributes to the labor market challenges of ex-prisoners (20) and among policymakers hoping to boost the post-imprisonment labor market attachment of ex-prisoners, with the expectation that doing so might reduce the persistently high levels of criminal recidivism also observed among ex-prisoners. (21)

    In spite of this recent interest in the relationship between imprisonment and employment, scholars have generally not examined the pre-imprisonment labor market experiences of prisoners in great detail. Most recent studies of the labor market effects of imprisonment report very little information on how employment and wages of soon-to-be imprisoned sample members vary over time. (22) Intriguingly, however, for those studies that do report such information, employment declines have been consistently observed beginning at least several quarters prior to imprisonment. (23) Rosa Cho and Robert LaLonde hypothesized that this pattern could be caused either by pre-imprisonment incarceration in county jails or by other changes in life circumstances correlated with entry into the prison--framing the basic alternatives to be tested in the present study. (24) Further, Haeil Jung suggested that the pre-imprisonment employment declines observed in his sample of male prisoners were similar to those observed in studies of job-training and other means-tested social welfare programs. (25) None of these studies, however, have attempted to identify the specific causes of these precipitous declines in employment prior to imprisonment nor have they considered the larger methodological implications for the estimation of imprisonment labor market effects.

    The absence of a more substantial examination of the pre-imprisonment labor market experiences of prisoners is surprising, since the quarters immediately prior to imprisonment offer an unparalleled window into the economic circumstances of soon-to-be prisoners at exactly the time that their involvement in criminal activities has brought them into contact with the criminal justice system. The exact sequence of events leading up to imprisonment has the potential to shed light on whether economic distress in the form of unemployment or low wages while employed leads to participation in crime or, conversely, whether participation in crime leads to economic distress--a question with substantial implications for theories of criminal behavior and criminal justice policy.

    Early research on the relationship between economic conditions and crime rates at the macro-level posited a strong positive relationship between unemployment levels and aggregate crime rates. (26) Most of these studies, however, only found a rather modest relationship between these two variables, indicating that while unemployment and crime may co-vary, the variance in unemployment is both insufficient and insufficiently correlated to explain the substantial changes that have occurred in the crime rate over the course of the twentieth century when most research was conducted. (27)

    At the individual level, stronger evidence of a relationship between unemployment and crime has been reported. A number of different longitudinal samples have all reported that employment is inversely related to adult crime rates, (28) with Sampson and Laub's work suggesting a strong negative correlation between job stability in early adulthood and subsequent crime participation. (29)

    Two challenges to the simplest interpretation of this work--that economic difficulties contribute to criminal offending--have been offered. The first challenge highlights the reciprocal and occasionally complementary nature of employment in legal and illegal markets. (30) Criminal acts and legal employment are not mutually exclusive ways of spending time or making a living. Given the sporadic nature of criminal offending, even income-generating criminal offending, participation in crime does not preclude participation in legal employment. (31) Furthermore, legal employment can provide opportunities for criminal acts. The second, and more direct challenge, comes from research that shows that many individuals with more than minimal criminal involvement begin offending early in their lives, becoming socially embedded in criminal or delinquent social networks, which both increases the likelihood of criminal justice involvement and decreases the likelihood of being in a subsequent position to participate in the conventional labor market. (32) The rapid declines in legitimate employment observed among soon-to-be prisoners potentially could speak to either of these schools of thought on the employment-crime relationship, assuming that the temporal ordering of criminal act, unemployment, and imprisonment can be reconstructed.

    The observed declines in employment prior to imprisonment have implications not only for theories of criminal behavior, but also for criminal justice policy. If imprisonment is preceded by a decline in employment, it is possible that the criminally-involved are not as insensitive to the changes...

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