Rebranding ex‐convicts

• DOI: http://doi.org/10.1111/jpet.12283
• Published date: 01 June 2018
• Date: 01 June 2018

Received: 18 February2017 Accepted: 11 October 2017

DOI: 10.1111/jpet.12283

ARTICLE

Rebranding ex-convicts

Young-Chul Kim1Glenn C. Loury2

1SogangUniversity

2BrownUniversity

Young-ChulKim, School of Economics, Sogang

University,Mapo-gu, Seoul 04107, South Korea

(yckim@sogang.ac.kr).

GlennC. Loury, Department of Economics, Box

B,Brown University, Providence, RI 02912, USA

(Glenn_Loury@brown.edu).

We develop a theoretical model explaininghow the problem of poor

labor market outcomes for ex-convicts might be alleviated by an

external intervention. While employers wish to avoid associating

with those who will end up returning to crime, they cannot be cer-

tain from the available information which convicts will reoffend and

which will not. We illustratethat, notwithstanding this informational

asymmetry,a government (or a civic society) can nevertheless design

a costly, yet net socially beneficial programthrough which some ex-

convicts can credibly convey their good intentions to employers.

Such a “rebranding” program can help more ex-convicts find legiti-

mate work, with fewer electing to return to crime than would other-

wise have been the case.

1INTRODUCTION

Surveys of employersshow that the stigma of a criminal record is substantial for ex-convicts seeking employment (e.g.,

Holzer, Raphael, &Stoll, 2006; Pager, 2007). Recent studies of ex-convict populations report that roughly half remain

jobless up to a year after their release (e.g., Visher,Debus-Sherrill, & Yahner, 2011). Convictsthereby become discour-

aged in their search for work or avoid formal employment opportunities preemptively (Travis, 2005). According to a

study by the Bureau of Justice Statistics in the United States, the rate of recidivism is significant: within three yearsof

release, about two-thirds of released prisoners are rearrested (Durose, Cooper, & Snyder, 2014) and 4 out of 10 are

reincarcerated (Pew Center on the States, 2011).1

We develop a theoretical model explaininghow this problem of poor labor market outcomes for ex-convicts might

be alleviated to some degree. This model draws on the basic idea of an equilibrium with self-confirming beliefs in the

presence of asymmetric information (e.g., Arrow, 1973; Coate & Loury,1993; Fang, 2001). We focus on what we take

to be an essential feature of the labor marketfor ex-convicts, namely, the idea that employers wish to avoid associating

with those who will end up returning to crime, but employers cannot be certain from the available information which

convictswill reoffend and which will not. However, the convicts themselves are presumed to know their own intentions.

Hence, our theoretical model focuses on this asymmetric information as well as on the attendant issues of adverse

selection in this market.

Our main objective by introducing this model is to illustrate that, notwithstanding this informational asymmetry,

a government (or a civic society) can nevertheless design a costly,yet net socially beneficial program through which

1Refer to National Research Council (2014) for a comprehensive study of incarcerationin the United States and Loury (2008) for the social problems origi-

natingfrom the poor labor market outcomes for ex-convicts.

356 c

2017 Wiley Periodicals,Inc. wileyonlinelibrary.com/journal/jpet Journal of Public Economic Theory.2018;20:356–366.