Does local context matter? Unemployment rates and the labor market consequences of incarceration

Abstract A robust body of research finds that incarceration jeopardizes post-release employment and earnings, and that these challenges are magnified for formerly incarcerated Black and Hispanic Americans relative to White Americans. Life course theory is often used to conceptualize the impact of a spell of incarceration, but the theory’s contextual component has been overlooked despite geographic variation in labor market opportunities. Place is also stratified by race and ethnicity, and Black and Hispanic Americans with a history of incarceration are more likely to reside in distressed communities than their White counterparts. Taken together, and extending prior research, we ask two questions: (1) To what extent does the local unemployment rate compound labor market challenges for individuals with a history of incarceration, and (2) are Black and Hispanic Americans with a history of incarceration disproportionately impacted by conditions of the local labor market? To do so, we draw on individual and county level data from the 1997 cohort of the National Longitudinal Survey of Youth (NLSY97) and employ an analytic strategy that treats individuals as their own control. Results indicate that labor market outcomes for formerly incarcerated persons are worse in higher unemployment areas than in areas with lower rates, and that the local labor market impact is more detrimental for Black Americans with a history of incarceration than for White Americans.