CRIMINAL LABELLING AND ITS IMPACT ON EMPLOYMENT, CRIME AND RECIDIVISM THROUGH THE LENS OF SEARCH THEORY

Abstract

This thesis extends the basic search-theoretic model formulated by Burdett et al. (2003), which interacts crime with frictional labour markets. Firms are allowed to observe a worker's previous criminal records, which creates heterogeneity amongst workers. A steady-state wage-posting equilibrium is completely characterised and the implications of two widely-used anti-recidivism policies on endogenous wages, employment rates and recidivism frequencies are analysed. The model predicts that in equilibrium, imposing harsher punishments on prisoners reduces the expected wages for ex-convicts and this in turn exacerbates recidivism. This suggests that harsher punishments for recalcitrant offenders may be counter-productive in tackling recidivism. The model surprisingly predicts that investments in rehabilitation efforts which improve the successful job-matching frequencies for ex-convicts can also worsen recidivism. This suggests that to effectively reduce recidivism, post-release job-matching needs to be focused on providing stable jobs of higher quality instead.