The Effect of Private Sector Work Opportunities in Prison on Labor Market Outcomes of the Formerly Incarcerated

This paper examines the effects of a private-sector prison work program called the Prison Industry Enhancement Certification Program (PIECP) on formal unemployment duration, duration of formal employment, and earnings of men and women released from various state prisons between 1996 and 2001. It also investigates the labor market dynamics of formerly incarcerated men and women. The program is found to increase reported earnings and formal employment on the extensive margin, with a stronger impact on the formal employment of women. There is little evidence that it increases formal employment along the intensive margin (i.e., duration of formal employment). Contrary to segmented labor market theories, superior employment (i.e., higher-paying jobs) does not lead to increased job stability. Roughly 92 % of individuals who obtained formal employment in the sample experienced job loss; however, reincarceration rates are too low to explain this fact. An evaluation of labor market dynamics reveals that traditional human capital variables, criminogenic factors, and a few demographic characteristics determine job loss. In addition, black women, single women, and women with more extensive criminal histories face greater barriers in the labor market than their male counterparts.