The minimum wage, income tax credits, and criminal recidivism

Amanda and I were invited to write up our recent research at VoxEU. A brief excerpt:

“As of 2016, there were 6,392 separate state restrictions on employment eligibility for individuals with felony records (Frederickson and Omli 2016) Our results raise the possibility of significant welfare benefits from broad wage policies through their support of released prisoners trying to re-enter the labour market. The minimum wage may serve as an efficiency wage that, while paying more than market estimates of released prisoners' marginal products, provides a public good in the form of reduced criminal activity. Similarly, the EITC can serve to push net wages above those available from criminal activity, increasing the opportunity cost of crime without the potential increases in unemployment associated with minimum wages, at least for women. These results speak to the potential impact of expanding access to the EITC for individuals who are not custodial parents. “

You can read the rest at