Absence of conflict of interest.
Citation
Highlights
- The study's objective was to examine the impact of entrepreneurship on employment and earnings for individuals who were previously incarcerated.
- The study used a nonexperimental design to compare the outcomes of formerly incarcerated entrepreneurs to a matched comparison group of formerly incarcerated non-entrepreneurs. Using administrative data and statistical models, the author compared outcomes of the treatment and comparison groups.
- The study found that formerly incarcerated individuals who participated in entrepreneurship had significantly fewer weeks of unemployment during the year and had significantly higher annual incomes compared to those who did not participate in entrepreneurship.
- This study receives a moderate evidence rating. This means we are somewhat confident that the estimated effects are attributable to entrepreneurship, but other factors might also have contributed.
Intervention Examined
Entrepreneurship
Features of the Study
The study used a nonexperimental design to examine the effects of entrepreneurship on employment and earnings for formerly incarcerated individuals. The primary data sources were the 1997 cohort of the National Longitudinal Survey of Youth (NLSY97) and manually coded information on “Ban-the-Box” policy changes across all states and counties in the U.S. The study used NLSY97 data from 1997 to 2015 and included “Ban-the-Box” policies for public employers that were implemented by December 2015. Eligible participants included individuals who were 12 to 18 years old when they were first surveyed in 1997.
In this study, individuals who identified as “self-employed” in the NLSY97 and who had been self-employed for over four weeks were classified as entrepreneurs. The treatment group included formerly incarcerated entrepreneurs, while the comparison group included formerly incarcerated non-entrepreneurs. The treatment and comparison groups were matched on multiple characteristics (demographic information, educational background, family history, and place of residence). The sample included 839 individuals who had previously been incarcerated, with more than half being White (50.19%) and men (51.2%). The author used statistical models to compare outcomes between the treatment and comparison groups.
Findings
Employment
- The study found that individuals in the treatment group had significantly fewer weeks of unemployment during the year relative to those in the comparison group.
- The study also found that Black participants in the treatment group had significantly fewer weeks of unemployment during the year compared to Black participants in the comparison group.
- However, the study did not find significant differences in employment for White study participants.
Earnings and wages
- The study found that individuals in the treatment group had significantly higher annual income relative to those in the comparison group.
- The study did not find significant differences in annual income between Black or White treatment group participants and comparison group participants.
Considerations for Interpreting the Findings
The study used a broad definition of entrepreneurship, which includes all individuals who identify as “self-employed” in the NLSY97. This definition, while inclusive, may limit our understanding of the true effects of entrepreneurship on labor market outcomes for formerly incarcerated individuals.
Causal Evidence Rating
The quality of causal evidence presented in this report is moderate because it was based on a well-implemented nonexperimental design. This means we are somewhat confident that the estimated effects are attributable to entrepreneurship, but other factors might also have contributed.