Original PapersThe Effect of Conviction on Income Through the Life Cycle 15
Section snippets
I. Introduction
A growing literature indicates that arrest and conviction limit legal earning opportunities. Recent studies find that the market penalty of lost income is large, both absolutely and in comparison with fines and prison terms [Lott (1992); Waldfogel (1994a)]. Furthermore, the adverse effects of arrest and conviction are at least somewhat persistent [Waldfogel (1994b); Grogger (1992)]. The large and growing involvement of urban youth in crime is thus alarming not only because of the direct harm to
Conviction Effects
Human capital theory [Becker (1964)] predicts rising wages and stable employment in jobs where workers and employers jointly invest in firm-specific human capital. Early in the career, the worker takes some of his compensation as training, so the money wage is below the value of his marginal product. Wages rise over the course of the career as the individual accumulates human capital and experiences a declining implicit reduction in take-home pay to cover training costs. The joint investment of
III. Data
The data for this study are assembled from the administrative records of the Administrative Office of the U.S. Courts (AO). The data consist of a two-observation panel on the legal income of criminals, with one observation before, and one after conviction. Preconviction data are extracted from presentence investigation reports, and postconviction data are taken from monthly probation reports. The primary sample used in this analysis is comprised of males convicted of fraud in the U.S. federal
IV. Analysis
This section examines four empirical questions relevant to the theory advanced above. First, how does first-time conviction affect job stability over the life cycle? Second, does the effect of first-time conviction on income vary over the life cycle so that conviction raises the income of young workers and decreases the income of older workers? Third, is the conviction effect over the life cycle different for workers who already have criminal records? Fourth, do the gains sought through fraud
V. Conclusion
This paper presents evidence that first-time conviction effects vary substantially by age, whereas subsequent conviction effects do not. First-time conviction raises the income of young offenders and reduces the income of older offenders, although subsequent conviction effects reduce income at all ages. The results are rationalized by assuming that first-time conviction moves workers off of career income profiles to less steeply sloped spot market profiles. Subsequent convictions simply
References (21)
- et al.
The Effects of Criminality and Conviction on the Labor Market Status of Young British Offenders
International Review of Law and Economics
(1995) Does Conviction Have a Persistent Effect on Income and Employment?
International Review of Law and Economics
(1994)- et al.
An Exploration of the Determinants of Labor Market Performance for Prison Releasees
Journal of Urban Economics
(1980) Human Capital
(1964)The Production of Human Capital and the Life-Cycle of Earnings
Journal of Political Economy
(1967)- et al.
Does Conviction Affect Employment Opportunities?
British Journal Criminology
(1974) - et al.
Delinquency and Stigmatisation
British Journal Criminology
(1971) The Correctional CarrotBetter Jobs for Parolees
Policy Analysis
(1975)- Freeman R. (1991). “Crime and the Employment of Disadvantaged Youths.” NBER Working Paper...
Theories of Poverty and Underemployment
(1975)
Cited by (79)
Working around the law: Navigating legal barriers to employment during reentry
2019, Law and Social InquiryOccupational Attainment and Criminal Justice Contact: Does Type of Contact Matter?
2024, Crime and DelinquencyHousing Instability Following Felony Conviction and Incarceration: Disentangling Being Marked from Being Locked Up
2023, Journal of Quantitative CriminologyCriminal History, Race, and Housing Type: An Experimental Audit of Housing Outcomes
2022, Criminal Justice and BehaviorThe Unintended Effects of Ban-the-Box Laws on Crime
2021, Journal of Law and Economics
- 15
We thank Linda Babcock, Donald Fullerton, Lowell Taylor, Joe Tracy, and seminar participants at Carnegie Mellon and Yale for helpful comments. All errors, of course, remain our own.