Labor Effects on the Unskilled Labor Market

Abstract

This paper provides the first analytical estimates of the impact of prison labor on the market for non-prison, unskilled labor. Estimates of the impact of prison labor on employment and wages of non-prison employees are derived using a supply and demand model similar to that used in the immigration literature, and generally accepted estimates of the aggregate demand and supply elasticities. Our results suggest minimal impact, given the current level of prison employment, and even with a significant expansion to twenty five percent of all prisoners.