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1. Introduction

Between 1988 and 2000, the nation’s incarceration rate doubled from about 250 to nearly

500 per 100,000 persons. The Bureau of Justice Statistics (BJS) estimates that approximately 9

percent of all men will serve some time in state or federal prisons, with considerably higher

figures for blacks (about 30 percent) and Latinos (16 percent). These trends are especially

pronounced for California, and within California, for Los Angeles in particular. California

houses a disproportionate share of the nation’s recently released prisoners. In 2001, about 23

percent of the nation’s approximately 600,000 recently-released prisoners resided in California,

in contrast to a state population equal to 11 to 12 percent of the nation’s. What’s more, of the

approximately 140,000 released prisoners in California in 2001, a disproportionate share of these

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    nearly 34 percent - returned to Los Angeles County (which houses about 28 percent of the

state’s population).1

No doubt, the successful reintegration of this growing population depends in part on the

employment potential of ex-offenders. Several studies have analyzed the labor market

consequences of involvement in the criminal justice system by testing for direct effects on future

employment and earnings of being arrested (Grogger 1995) or of serving time (Freeman 1996;

Kling 1999; Kling et. al., 2000). These studies show that arrests and imprisonment are both

associated with lower employment and earnings, ranging from reductions of 10-30% for

employment and/or earnings. These reductions might be associated with factors operating on

both the supply (i.e., worker) and demand (i.e., employer) sides of the labor market, but recent

evidence points to very strong effects operating on the demand side of the market (Pager, 2002).2

1 2 This data is reported from the Bureau of Justice Statistics (2001) and the U.S. Census Bureau (2001) for California. Using data from an audit study of matched pairs of offenders and non-offenders by race in Milwaukee, Pager shows that having a criminal record reduced the frequency of job offers by half among whites and by two-thirds among blacks. Even among non-offenders, there was a strong negative effect of being black as well.


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