Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Bergen, Department of Economics
No 07/16: Incarceration, recidivism and employment
Bhuller Manudeep (), Gordon B. Dahl (), Katrine V. Løken () and Magne Mogstad ()
Additional contact information
Bhuller Manudeep: Department of Economics, University of Chicago; Research Department, Statistics Norway, Postal: Department of Economics, University of Chicago, 1126 E. 59th Street, Chicago, IL 60637, USA
Gordon B. Dahl: Department of Economics, UC San Diego, Postal: Department of Economics, University of California, San Diego, 9500 Gilman Drive #0508, La Jolla, CA 92093-0508, USA
Katrine V. Løken: Department of Economics, University of Bergen, Postal: P.O. Box 7800, 5020 Bergen, Norway
Magne Mogstad: Department of Economics, University of Chicago; Research Department, Statistics Norway; NBER, Postal: Department of Economics, University of Chicago, 1126 E. 59th Street, Chicago, IL 60637, USA
Abstract: Understanding whether, and in what situations, time spent in prison is criminogenic or preventive has proven challenging due to data availability and correlated unobservables. This paper overcomes these challenges in the context of Norway’s criminal justice system, offering new insights into how incarceration affects subsequent crime and employment. We construct a panel dataset containing the criminal behavior and labor market outcomes of the entire population, and exploit the random assignment of criminal cases to judges who differ systematically in their stringency in sentencing defendants to prison. Using judge stringency as an instrumental variable, we find that imprisonment discourages further criminal behavior, and that the reduction extends beyond incapacitation. Incarceration decreases the probability an individual will reoffend within 5 years by 27 percentage points, and reduces the number of offenses over this same period by 10 criminal charges. In comparison, OLS shows positive associations between incarceration and subsequent criminal behavior. This sharp contrast suggests the high rates of recidivism among ex-convicts is due to selection, and not a consequence of the experience of being in prison. Exploring factors that may explain the preventive effect of incarceration, we find the decline in crime is driven by individuals who were not working prior to incarceration. Among these individuals, imprisonment increases participation in programs directed at improving employability and reducing recidivism, and ultimately, raises employment and earnings while discouraging further criminal behavior. Contrary to the widely embraced ‘nothing works’ doctrine, these findings demonstrate that time spent in prison with a focus on rehabilitation can indeed be preventive.
Keywords: crime; employment; incarceration; recidivism
62 pages, July 25, 2016
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