Cost, Benefits and Distributional Consequences of Inmate Labor


We estimate that permitting inmate labor would likely increase national output, but by
less than 0.2 percent of Gross Domestic Product. The largest social benefits from inmate labor
are likely to come about from decreased recidivism, although the effect of inmate labor on
subsequent crime and recidivism rates has not been adequately studied. The potential inmate
workforce is low skilled. We estimate that permitting inmate labor could reduce wages of high
school dropouts in the private workforce by 5 percent. To improve the economic contribution of
inmate labor, we propose that private firms be allowed to bid for inmate labor, and that inmate
workers be subject to all relevant labor legislation, including the right to collective
representation. Alternative strategies for reducing recidivism and integrating offenders into
mainstream society upon release, such as education and training, should also be considered,
perhaps in conjunction with inmate labor.

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Reprinted in IRRA 53rd. Annual Proceedings, January 2001.
Working Papers