Amanda Y. Agan: The Minimum Wage, EITC, and Criminal Recidivism


Monday, January 27, 2020, 12:00pm to 1:30pm


Allison Dining Room

Amanda Y. AganAssistant Professor of Economics, Rutgers University. Visiting Assistant Professor, Stanford Institute for Economic Policy Research (SIEPR), 2019-2020.

Amanda AganFor recently released prisoners, the minimum wage and the availability of state Earned Income Tax Credits (EITCs) can influence both their ability to find employment and their potential legal wages relative to illegal sources of income, in turn affecting the probability they return to prison.

Using administrative prison release records from nearly six million offenders released between 2000 and 2014, we use a difference-in-differences strategy to identify the effect of over two hundred state and federal minimum wage increases, as well as 21 state EITC programs, on recidivism.

We find that the average minimum wage increase of $0.50 reduces the probability that men and women return to prison within 1 year by 2.7%. This implies that on average the effect of higher wages, drawing at least some released prisoners into the legal labor market, dominates any reduced employment in this population due to the minimum wage. These reductions in returns to incarcerations are observed for the potentially revenue generating crime categories of property and drug crimes; prison reentry for violent crimes are unchanged, supporting our framing that minimum wages affect crime that serves as a source of income. The availability of state EITCs also reduces recidivism, but only for women.

View the paper
(Joint with 
Michael D. Makowsky)

About the speaker

Amanda Agan is an Assistant Professor of Economics and an Affiliated Professor in the Program in Criminal Justice at Rutgers University. She is spending the 2019-2020 academic year as a Visiting Assistant Professor at the Stanford Institute for Economic Policy Research (SIEPR). She is also a Faculty Research Fellow at the National Bureau of Economic Research and an affiliate of the Abdul Latif Jameel Poverty Action Lab (J-PAL)–North America.

Professor Agan's research focuses on labor economics and the economics of crime, including the unintended consequences of policies such as sex offender registration and ban the box laws. Her latest publication, "Is Your Lawyer a Lemon? Incentives and Selection in the Public Provision of Criminal Defense," joint with Matthew Freedman and Emily Owens, is forthcoming in the Review of Economics and Statistics.

Prior to joining Rutgers University in 2016, she was a post-doctoral research associate in the Economics Department and the Industrial Relations Section at Princeton University. She received her PhD in Economics from the University of Chicago in 2013 and holds a BA in Economics from George Mason University.

Learn more about Amanda Agan's research



See also: Spring 2020