How does occupational licensing affect employment and recidivism?

The challenges faced by incarcerated individuals and their families do not end when the individual leaves prison. A recent Kauffman Foundation paper, No Bars: Unlocking the Economic Power of the Formerly Incarcerated, outlines the challenges facing the formerly incarcerated in securing employment. In particular, the paper looks at how occupational licensing can stifle both traditional employment and entrepreneurship, as occupational licensing requirements often bar those with criminal records from starting or working in businesses that otherwise would provide economic independence and boost the overall economy.

The paper explores the relationship between employment and recidivism. From the paper:

“Research…indicates that employment plays an important role in encouraging rehabilitation and reducing recidivism.[1] A study in Illinois found that formerly incarcerated people ‘who are employed a year after release can have a recidivism rate as low as 16 percent'[2] – compared to the 48 percent of all formerly incarcerated people who return to prison within three years. The high rate of unemployment among this population, then, ‘places public safety at risk – and pushes the cost of incarceration and crime onto the public.'[3] Occupational licensing is promoted as a means to enhance public safety. However, if unemployment leads to recidivism, then barriers to employment for formerly incarcerated people also can be seen as a risk to public safety. Denying licenses to those with criminal records to protect the public might actually lead to an increase in crime.”

Another recent study by Stephen Slivinski highlights this connection between occupational licensing, employment, and recidivism.  From the study:

“This study estimates that between 1997 and 2007 the states with the heaviest occupational licensing burdens saw an average increase in the three-year, new-crime recidivism rate of over 9%. Conversely, the states that had the lowest burdens and no such character provisions saw an average decline in that recidivism rate of nearly 2.5%.”

With such a clear link between occupational licensing, employment, and reducing recidivism, what can be done to restructure occupational licensing rules so as to not deter the formerly incarcerated from participating in the workforce?

The “No Bars” paper recommends these policy changes to remove unnecessary occupational licensing barriers to employment:

• Exclude people with criminal records from jobs that require occupational licenses only when their convictions are recent, relevant to the occupation, and pose a public safety threat.
• Offer former inmates the opportunity to secure certificates of restoration or rehabilitation that would open the door to receiving occupational licenses.
• Prevent individuals who have been arrested for, but never convicted of, crimes from being disqualified from occupational licensing based solely on the arrest.
• Question the need for occupational licensing policy altogether, rather than simply considering its restructuring. When public health is not threatened, licensing could be replaced by certification or another lesser form of regulation.

To read No Bars: Unlocking the Economic Power of the Formerly Incarcerated in full, check out the paper here.