The incarceration rate for the U.S has more than quadrupled since 1980 with currently over two million individuals being held in federal, state, or local jails, with projected increases in rates setting to exacerbate an already heavy financial burden (Harrison and Beck, 2006). Expenditures for state corrections departments have steadily climbed and have soared from $15.6 billion in 1986 to over $38 billion in 2001 (Stephan, 2004). The high rates of incarceration has directly affected the number of ex-convicts being released back into communities with an estimated figure in the region of over 600,000 inmates released under supervision and general release conditions each year (Langan and Levin, 2002).
Unfortunately, a significant proportion of ex-offenders released recidivate by being rearrested within a relatively short span. With national figures indicating that two-thirds are re-arrested and roughly 52 percent are re-incarcerated for or a violation of their release supervision requirements or a new crime within three years of release (Langan and Levin, 2002). Some of the key challenges facing ex-offenders' successful reentry into society are their inability to find employment, which is partly due to the numerous behavioral and mental problems facing those released (Lurigo & Swartz, 2000). Disproportionate amounts are affected by mental and substance abuse problems, in addition to below average educational attainment (Harlow, 2003; Mears, Winterfield, Hunsaker, Moore, & White, 2003). About 41 percent of individuals aged 18 and over in state and federal prisons as well as local jails have less than a high school education, compared to 18 percent of the general population of the same age (Harlow, 2003; Mears, et al., 2003). In acknowledgment of such problems, policy makers have initiated numerous programs that address ex-offenders' needs prior to release and immediately after, such as education and vocational training programs to improve employability.
Educational and vocational training have been postulated as essential tools to circumvent recidivism of ex-offenders. Such programs have been cited primarily as a way to enhance the cognitive and skill level of ex-offenders to make them more marketable in the workforce (Uggen, 2000). The Realization of such goals has been argued would increase the employment rate and the quality of jobs available to ex-offenders, which in turn would reduce recidivism (Uggen, 1999). Such programs have also been cited to increase self worth and discipline, which helps ex-offenders to stay clear of criminal behavior upon release (Wilson, Gallagher, & Mackenzie 2000). However, legislative and social barriers still present impediments to employment and the ability to earn a viable income. Research has shown that incarceration has dire effects on future employment and wages of ex-offenders (Western, 2002; Needels, 1996; Waldfogel, 1994; Grogger, 1995). Such adverse effects of incarceration on the employability and income of ex-offenders are fuelled by statutes that prohibit or compel employers to exclude ex-offenders from numerous positions through the increasing use of criminal background checks in hiring decisions (Harris and Keller, 2005). These ubiquitous restrictions further reinforce the stigma of being an ex-con and limit the social networks that are exposed to ex-offenders (Rose and Clear, 2003).
As legal and social conditions continue to preclude a significant proportion of ex-offenders from being assimilated into the workforce, entrepreneurship has emerged as a possible alternative to traditional employment. Microenterprise development has been the term coined to describe entrepreneurship programs that provide access to business training and capital, which may be unavailable to disadvantaged groups (Sanders, 2002). As such, recipients of microenterprise programs normally launch ventures that require limited start up capital; such initiatives are normally seen through the proliferation of a number of small-scale repair, services, and vending initiatives that may involve family members (Midgley, 2008). It is estimated that over 22 million microenterprises operate in the U.S. (Edgcomb and Klein, 2005), which apart from providing job development and self-sufficiency for the unemployed, have been commended as a measure to alleviate poverty and revitalize low-income communities through the creation of jobs (Clark & Houston, 1993). Other proponents have cited the ability to build networks between individuals often referred to as social capital as a central means by which microenterprise programs can facilitate growth, through the creation of strong bonds that link the individual within local and business communities (Jurik, Cavender, & Cowgill, 2006). Studies have also added to the utility of microenterprise programs geared towards ex-offenders by pointing out that a significant cross-section of ex-offenders possess strong entrepreneurial aptitudes (Fairlie, 2002).
Further clarification on the utility entrepreneurship will be done through a comprehensive review of the relevant literature. Studies highlighting the general applicability of vocational, education and entrepreneurship programs will first be reviewed. Literature will then be assessed on the personality traits and aptitude of prisoners towards entrepreneurship before evaluating how entrepreneurship has been utilized by other disadvantaged groups.
The feasibility of targeting funding towards entrepreneurship programs as a reentry measure for ex-offenders will be assessed. This will be done by exploring the efficacy of entrepreneurship focused educational and vocational training programs on reducing the recidivism of former incarcerated men and women. Significant amounts of ex-offenders released from penal institutions are with mental and substance abuse problems, in addition to lacking requisite education and skills to become active participants in the workforce (Harlow, 2003; Lurigo and Swartz, 2000; Mears, et al., 2003). Ex-offenders who have had the opportunity of engaging in educational and vocational training programs are also hampered by legislations that restrict their employment and by the stigma of being ex-convicts (Harris and Keller, 2005). Such hindrances make ex-offenders disproportionately unemployed, affect their job stability, and considerably restrict them to menial jobs, which are often times not sufficient sources of income (Western, 2002; Needels, 1996; Waldfogel, 1994; Grogger, 1995). In order to address some of those issues new programs are needed that are tailored for the specialized needs of prisoners. Such an initiative has been taken through the incorporation of entrepreneurship courses often times with possible sources of funding to promote ex-offenders' economic self-sustainability by providing an avenue for them to become micro business owners. To assess the effects of entrepreneurship training on recidivism, individuals will be randomly chosen from two entrepreneurship programs, then matching samples will be chosen on the basis of gender, race, age, offence, education, and length of incarceration from two general vocational programs and from a control group with no training. Rates of recidivism will then be evaluated annually over three years for the respective groups to determine the effectiveness of the programs.
Ex-offenders are disproportionately affected by numerous social problems such as substance abuse, mental problems and low educational attainment that hinders their reentry into society and leads to recidivism (Harlow, 2003; Lurigo and Swartz, 2000; Mears, et al., 2003). To address some of the social ills faced by ex-offenders, particularly low educational and job skills of offenders, educational and vocational programs have been implemented. Nevertheless, legal barriers and social stigma continue to pose a hindrance to the general applicability and success of such programs (Western, 2002; Needels, 1996; Waldfogel, 1994; Grogger, 1995). As such, entrepreneurship programs that have been shown to generate measured success with other disadvantaged groups have been cited as possible alternatives that can be geared towards ex-offenders (Sanders, 2002; Sanders, 2004; Klein, Lisultanov & Blair 2003; Else, Krotz & Budzilowicz 2003; Fong, Busch, Armour, Heffron, Chanmugam, 2007).
The literature review will address three areas related to the efficacy of entrepreneurship programs in staving off recidivism. The first section will address the efficacy of vocational programs in preventing recidivism and the value of entrepreneurship in such programs (Maguire, Flanagan, Thornberry, 1988; Saylor and Gaes, 1995; Saylor and Gaes, 1997; Washburn, 1987; Goodman, 1982; Adams, et al., 1994). The second section will focus on the personality traits of entrepreneurs and the aptitude of offenders towards entrepreneurship (Rieple, 1998; Sonfield and Barbato 1994; Sonfield, Lussier, & Barbato, 2001; Fairlie, 2002). Finally, the third section will discuss research related to the use of entrepreneurship as a means utilized for upward mobility by other disadvantaged groups such as refugees and individuals below the poverty line (Sanders, 2002; Sanders, 2004; Klein, Lisultanov & Blair 2003; Else, Krotz & Budzilowicz 2003; Fong, et al., 2007).
Prison industry has been cited by many as essential means through which to reform individuals through the instilling of skills and discipline in a population presumably lacking such obedience by their mere presence in a correctional institution (Maguire, et al., 1988). The usefulness of such programs has nevertheless been questioned, most notably by Martinson (1974) through his report in which he declared that no rehabilitative measure including vocational programs work. Since then numerous studies have been conducted, which has supported the notion that vocational and educational programs are not effective or on the contrast have found support for their usefulness.
Maguire et al (1998) looking at almost 2,000 New York inmates from seven maximum-security correctional systems estimated the effect of prison industry employment on post-release recidivism among adult male offenders. Evidence presented by Maguire et al. (1988) showed that from the sample participants were less likely to recidivate than the comparison group with recidivism rates of 29 percent and 34 percent respectively for each group. However once an array of prisoner characteristics such as prior felony arrests, military service, marital status, and time served are controlled for, having worked in prison no longer predicts lower recidivism rates.
Saylor and Gaes (1997) in their longitudinal study of the Post Release Employment Project on the contrary found evidence in support of the efficacy in using vocational training programs as a measure against recidivism and means to improve ex-offenders' employability. In their study, they found that 71 percent of correctional employment and vocational program participants were able to establish and maintain employment as apposed to 63 percent of the comparison group. Using prior criminal history in the analysis to prevent selection bias, Saylor and Gaes (1997) also found that those participants in work and vocational training recidivated less than those in the comparison group. Only 6.6 percent of the participants in vocational and work programs were rearrested in comparison to 10.1 percent of the group of non-participants.
Adams et al (1994) in their study addressed the impact of prison education programs on recidivism. The study examined behavior and post release recidivism of 14,411 inmates in Texas who were admitted and released from the Texas Department of Criminal Justice Institutional Division (TDCJ-ID) between March 1991 and December 1992. The sample included all inmates released on parole, expiration of sentence, and mandatory supervision, as well as participants and non-participants in the educational programs division of the TDCJ-ID known as the Windham School System (Windham).
Windham participants and non-participants were compared on individual variables (e.g. age, sex, race, and educational achievement), criminal history and current offence characterization (e.g. conviction offence, sentence length, prior incarcerations), and disciplinary involvement while incarcerated. Windham provided information regarding the types of programs and hours of participation as well as test scores. The outcome variable of recidivism was measured up to March 1994 using reincarceration rates, with the follow up period varying according to inmate release with a range from 14 to 36 months. Groups of inmates were compared according to non-participation (7,793), participation in academic programs (5,130), participation in vocational programs (208), and participation in both academic and vocational programs (1280).
The results of the study showed that inmates with less than 100 hours of participation in academic programs had a recidivism rate of 25% in comparison to 16.6% for inmates with over 300 hours and 23.6% for inmates who did not participate. Similar trends were found for inmates in vocational programs, with recidivism rates for less than 100 hours of participation being 22.8%, inmates with over 300 hours had a rate of 18.3%, and non-participants had a rate of 22.4%. The results indicate that the chief factor relating to the effectiveness of vocational and education programs on recidivism was the amount of time in which inmates were involved in the programs. Nevertheless, the relatively short time span of inmates' exposure to the programs, partly due to attrition caused by differential release dates limits the ability for drawing a conclusive assessment.
Studies have also shown that entrepreneurship programs that have been incorporated in prison vocational programs have had numerous benefits. Washburn (1987) evaluated the experience of inmates in four prisoner entrepreneurship programs. The programs were economic ventures in which inmates assumed the responsibility of being managers and running a business. Programs were diverse and included initiatives such as business that sold novelties to tourist but was run by a committee comprised of inmates as well as a smaller scale program started by graduates of a prison based computer-training program, where the partners served as the managers. Several benefits were reported to have been derived from the programs including improved sense of worth among inmates; the opportunity to send money to support their families; and in a small number of cases the self-belief to start their business upon release. While the study did not evaluate a recidivism rates as a measure of success, the findings highlighted the multifaceted benefits that can be derived from the incorporation of entrepreneurship programs in prisons.
Goodman (1982) contrasted the experience of three states, which experimented with inmate run industries to state run programs in order to develop successful guidelines on how programs should be structured. Goodman (1982) found that state run programs were plagued with problems ranging from insufficient training, inadequate supply of work, and legislation which severely limited their markets. The inmate-run industries were in contrast presumed to be more successful as participants learnt new trades, worked regular shifts and earned wages significantly higher than in state programs. The structure of inmate run programs were also more reflective of the outside world as inmates were hired and fired according to their performance and qualifications. The utility of making programs more reflective of the outside world assuages the process of ex-offenders' reentry upon release by dampening the steep contrast of freedom and confinement (Goodman, 1982).
The efficacy of utilizing entrepreneurship programs as a tool to assist ex-offenders is vindicated by studies that suggested that a large cross-section of inmates possess strong entrepreneurial aptitudes. (Sonfield and Barbato, 1994; Sonfield, Lussier & Barbato, 2001). This was shown through the utilization of the Miner Sentence Completion Scale-Form T (MSCS-T) testing instrument, which has accurately been shown to measure motivational factors associated with entrepreneurial success and as well as used as a predicator of entrepreneurial firm growth in other studies (Bellu, Davidson & Goldfarb, 1990). The MSCS-T measures for self achievement; a preference for avoiding unnecessary risks; a desire for feedback of the results of one's efforts; an aspiration for personal motivation; and a desire to plan for the future. Sonfield and Barbato, (1994) administered MSCS-T to a sample of 29 male prison inmates in New York , with the results indicating that some prison inmates possess strong entrepreneurial aptitudes (Sonfield and Barbato, 1994).
In a later study, Sonfield et al (2001) expanded on his study using a sample of 59 inmates from three different states with comparison groups from the entrepreneur typologies of “fast growth” entrepreneurs, “slow growth” entrepreneurs, “normative” entrepreneurs, and “manager scientist.” The inmates tested scored higher on the MSCS-T than did the comparison group with the exception of “fast growth” entrepreneurs.
Rieple (1998) operationalized propensity for entrepreneurship through the General Entrepreneurial Tendency (GET) test, which assesses the personality traits: need for autonomy and independence; risk-taking; internal locus of control; creativity; and need for achievement. Rieple (1998) using a sample of 138 prisoners and 55 probationers compared their GET test results with previous data on entrepreneurs, civil servants and nurses. It was found that offenders achieved higher scores than the sample of nurses and civil servants but less than the sample of entrepreneurs (Rieple, 1998).
Fairlie (2002) in a longitudinal study examined the relationship between drug dealing as a youth and legitimate self-employment in later years; found that drug dealing had a positive and statistically significant effect on the likelihood of self-employment. Data was analyzed from the National Longitudinal Survey of Youth (NLSY) on a representative sample of 12,686 individuals aged between 14 and 22 years when they were first interviewed in 1979. Participants were interviewed annually from 1979 to 1996. Respondents were asked an array of questions including participation in delinquent and criminal activities such as how many times they sold marijuana and hard drugs such as heroin or cocaine in the previous year. Individuals who reported selling hard drugs or marijuana on six or more occasions were defined as drug dealers in this study. The findings indicated that individuals who used drugs with less frequency and reported receiving more profits from selling drugs or sold more regularly, were more likely to choose self-employment than other drug dealers (Fairlie, 2002). The results were interpreted as providing evidence that drug dealers possessed strong entrepreneurial aptitudes that propelled them to future self-employment.
The importance of the Fairlie (2002) results is reinforced by statistics that indicate that between 1980 and 2000, drug arrests more than doubled unlike arrests for property and violent crimes (Western, 2006). The strong propensity towards entrepreneurship by individuals who are part of the fastest growing arrest group, underscores the possible importance for utilizing entrepreneurial programs to help facilitate legitimate future self-employment of inmates upon release, which may result in lower recidivism rates.
Sanders (2004) found evidence in support of entrepreneurship in a longitudinal study looking at women who participated in seven microenterprise programs, low income self-employed non-participants, and low income women who were working but not self-employed. The women were matched on age, race, education, marital status, and the presence of children. The outcome variable of income and poverty status was then assessed to evaluate whether entrepreneurship had effects on future earnings. The results found that there was no statistically significant difference between the groups, but it was interesting to note that all groups of women made considerable gains in income. All three groups of women were at 150 percent below the poverty line but by the end of the study, about 47 percent had moved above the poverty line (Sanders, 2004). Though the groups did not diverge in earnings, the fact that all made similar gains serve as evidence that entrepreneurship may serve as a viable alternative for disadvantaged groups.
Klein et al (2003) in their assessment of 10 microenterprise programs that provided self-employment and training classes to recipients of the Temporary Assistance for Needy Families (TANF) fund, found that within two years participants had made significant gains with the vast majority reporting improved income and 36 percent moving out of poverty. Results also indicated that gains were also more pronounced when self-employment was supplemented with conventional wages, as participants who reported working when joining the program reported the most benefits. However, information gathered comparing participants in the microenterprise program to a nationally representative of TANF caseload found notable differences, which may suggest that individuals with certain traits or achievement were more likely to gravitate towards entrepreneurship programs. The participants in the microenterprise programs were shown to be considerably more educated that the TANF caseload, with 81 percent having at least high a school diploma in comparison to just 46 percent of the representative sample. Age and experience were also factors with microenterprise participants more likely to be between the ages of 35-49 and 99 percent indicating that they had some prior work experience in comparison to 43 percent of the TANF sample indicating that they that they had never worked (Klein, et al., 2003).
Though the findings lend support to the utility of entrepreneurship, if the characteristics of individuals participating in programs are to be taken into consideration, a significant proportion of ex-offenders may not possess the attributes needed for success due to low educational and skill levels (Harlow, 2003). To achieve the greatest success, entrepreneurship programs can be argued would best fit the needs of specific groups of prisoners. Programs could be tailored to individuals who display high entrepreneurial aptitudes but also those who have acquired certain “requisite” skills and education.
Language barriers and problems associated with adapting to a new culture are some of the most daunting problems facing refugees (Fong, et al., 2007). Raijman (2001) postulate the idea of a blocked hypothesis that asserts that refugees and immigrants who experience or anticipate disadvantages in the employment market may turn to self-employment. Although such problems do not equate to the legal barriers and stigma facing numerous ex-offenders, they may still manifest in similar levels of disadvantage such as poverty and problems associated with assimilating into the wider society. Such a situation has theoretical implications, as it has been postulated that pervasive structural disadvantage may lead to a weakened belief in cultural norms that eschew unlawful behavior such as violence and drug use (Warner, 2003). Realizations of such weakened beliefs in cultural norms can be interpreted through the findings of Shaw and McKay (1969) where immigrant communities pervaded by high levels poverty remained reported high levels of crime.
Fong et al (2007) analyzing the successes and challenges of refugee entrepreneurs conducted interviews and held focus groups in the U.S with refugee entrepreneurs, general refugee and immigrant population , refugee service providers, staff from community organizations, and technical assistant consultants. Refugee participants in the study were from Vietnam, Korea, China, Pakistan, Iran, Mexico, Israel and Somalia. The vast majority of the participants (85%) described factors at both the individual and community level that facilitated the development and success of refugee owned businesses (Fong, et al., 2007). Individual level factors were mostly based on personality traits and supports other studies that points to the necessity of entrepreneurial aptitudes in predicting success (Sonfield & Barbato, 1994; Sonfield, Lussier & Barbato, 2001). Prior experience was another factor cited that enabled success, as refugees were fully cognizant of their skills and were thus able to model their business accordingly (Fong, et al., 2007). Such findings lends support to the idea that the incorporation of entrepreneurship programs in prison may serve as a gateway for offenders to come to a realization of their abilities, which would instill the necessary confidence needed to start legitimate businesses (Goodman, 1982; Washburn, 1987).
The literature has a provided clear support for the utility of entrepreneurship as a means for helping groups affected by poverty and unemployment. Through the acknowledgement, that ex-offenders are disaproptionatly affected by poverty and unemployment due to legal barriers and stigma, the practicality of self-employment as way for some offenders to reenter the labor market becomes clear. Empirical evidence is however lacking on what proportion of ex-offenders would most benefit from entrepreneurial support. Though evidence has pointed to strong entrepreneurial aptitudes by inmates towards entrepreneurship, other factors may be needed to facilitate success such as prior work experience and education. As such, vocational and educational programs in prisons may serve as fertile ground to incorporate entrepreneurial training. However to pave the way for such advances in policy evidence is needed on the efficacy of entrepreneurship in reducing the recidivism of ex-offenders.
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