The Long-Term Impact of Incarceration During the Teens and 20s on the Wages and Employment of Men

Abstract

This article examines the long-term impact of incarceration during the teens and 20s on labor market outcomes and its causal pathways via education and job experience. Using the 1979 National Longitudinal Survey of Youth, this article finds that incarceration in youth correctional institutions significantly reduces wages and the total number of weeks worked per year at age 39 or 40 while incarceration during the 20s only lowers wages. Further, this study finds that incarceration in youth correctional institutions lowers education and job experience at age 39 or 40 while incarceration in the 20s only significantly depresses job experience.

KEYWORDS:

• education
• employment
• hourly wages
• incarceration during the 20 s
• incarceration in youth correctional institutions
• job experience

ACKNOWLEDGMENTS

I thank Robert LaLonde, Jens Ludwig, and Bruce Meyer for many helpful comments and suggestions. I also thank Amer Hasan, Sarah Lee, Justin Ross, Nancy Staudt, Michelle Pannor Silver, Laura Wherry, Patrick Wightman, and April Wu for discussion and support. I appreciate the helpful comments of Maureen Pirog, Kosali Simon, and workshop participants at the 2014 Summer Research Workshop at the School of Public and Environmental Affairs at Indiana University. The views expressed in this article are mine and do not necessarily reflect the views of any of these organizations or individuals.

Notes

U.S. Department of Justice, Bureau of Justice Statistics, National Prisoner Statistics Program. Online at http://www.bjs.gov/index.cfm?ty=nps.

Freeman (1992) defined the indicator variable for incarceration = 1 if the person answered yes to, “Have you ever been sentenced to spend time in a corrections institution, like a jail, prison, or a youth institution like a training school or reform school?” in NLSY79 data.

The exconvicts described in this data are from the federal criminal justice system.

NLSY79 User’s Guide by Center for Human Resource Research (2004).

The analysis excludes men who were born in 1957 to 1959 who became 21 to 22 in 1979 because they are too old to be recorded with actual job experience since age 18. It is also hard to obtain consistent incarceration records because they were already over 20 in 1979.

Most of states, judges have the discretion to transfer juveniles to adult courts through a waiver hearing when criminal charges are serious enough.

The expunged incarceration record in public records does not lead to measurement error in our analysis because the NLSY79 still have this incarceration record by asking a question to individuals.

An annual residence item in the NLSY79 is the survey question: “Type of residence R is living in (right now).” One of the answers is “jail.” In this survey, jail indicates the broad meaning of incarceration in any correctional facilities including local jails, state, and federal correctional facilities.

This may lead to the underestimation of the impact of incarceration on earnings and employment in the long run. Thus, the negative impact of incarceration may be larger than what this article estimates.

To obtain the accumulated job experience in years by each age, the total number of weeks worked is divided by the total number of weeks available by each age.

Some men in the treatment group in three analyses were reincarcerated later, which is understood to be a possible consequence of the first incarceration.

Calendar year dummies are 1979 to 1983, 2000, 2002, and 2004 (reference year 1979) for Analysis 2 while they are 1984 to 1988, 2000, 2002, and 2004 (reference year 1984) for Analysis 3.

Assuming that the outcome differences between the treatment and comparison groups would have been the same before and after incarceration if there were no incarceration, this DID estimator is consistently estimated.