The Minimum Wage, EITC, and Criminal Recidivism

53 Pages Posted: 12 Jan 2018 Last revised: 14 Jul 2021

See all articles by Amanda Y. Agan

Amanda Y. Agan

Rutgers University, Department of Economics

Michael D. Makowsky

Clemson University - John E. Walker Department of Economics

Date Written: June 1, 2020

Abstract

For released prisoners, the minimum wage and Earned Income Tax Credits (EITCs) can influence their ability to find employment and their potential wages relative to illegal sources of income, affecting the probability they are reincarcerated. Using administrative prison release records we identify the effects of state variation in minimum wages and EITC policies on recidivism. We find that a minimum wage increase of $0.50 reduces the probability an individual returns to prison within 3 years by 2.15%; these reductions come mainly from returns for property and drug crimes. The availability of state EITCs also reduces recidivism, but only for women.

Keywords: criminal recidivism, minimum wage, earned income tax credit

JEL Classification: J22, J23, J38, K14, K40

Suggested Citation

Agan, Amanda Y. and Makowsky, Michael D., The Minimum Wage, EITC, and Criminal Recidivism (June 1, 2020). Available at SSRN: https://ssrn.com/abstract=3097203 or http://dx.doi.org/10.2139/ssrn.3097203

Amanda Y. Agan

Rutgers University, Department of Economics ( email )

New Jersey Hall
75 Hamilton St
08901, NJ Princeton 08540
United States

HOME PAGE: http://https://sites.google.com/site/amandayagan/

Michael D. Makowsky (Contact Author)

Clemson University - John E. Walker Department of Economics ( email )

Clemson, SC 29634
United States

HOME PAGE: http://michaelmakowsky.com

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