Policy Changes Needed to Unlock Employment and Entrepreneurial Opportunity for 100 Million Americans with Criminal Records, Kauffman Research Shows

Men of color disproportionately affected by barriers

Rethinking occupational licensing policy could counter recidivism, encourage entrepreneurship and boost the American economy

KANSAS CITY, Mo. (Nov. 29, 2016) For the 30 percent of U.S. adults with criminal records, attaining economic success after leaving prison relies on the ability to find good jobs, says a new paper released today by the Ewing Marion Kauffman Foundation. Even those with minor offenses and those who have been arrested but not charged can encounter numerous barriers in their search for employment. Significant among the obstacles are occupational licensing requirements that bar those with criminal records from professions that otherwise might provide economic independence and positively impact the American economy.

The study, “No Bars: Unlocking the Economic Power of the Formerly Incarcerated,” summarizes recent research on employment of formerly incarcerated individuals, focusing on the disproportionate effect of occupational licensing requirements.

Between 60 percent and 75 percent of the more than 600,000 Americans released from federal and state prisons each year are still unemployed one year after release. Those who have found jobs make less money than do individuals without criminal records.

“Hundreds of professions that require occupational licenses could provide paths to economic independence for those formerly incarcerated, except for the fact that their criminal histories alone may ban them from receiving licenses, even if their convictions had no relevancy to the job,” said Emily Fetsch, research assistant at the Kauffman Foundation and author of the paper. “Removing these barriers would benefit the formerly incarcerated and their families, curb recidivism and boost the economy overall.”

High rates of incarceration affect people of color disproportionately. Compared to white men, black men are six times more likely to be incarcerated, and Hispanic men are 2.5 times more likely to be incarcerated.

“Licensing restrictions can block an important avenue to self-sufficiency,” says Jason Wiens, policy director at the Kauffman Foundation. “Numerous options for reform exist.”

The effect of occupational licensing is a closing off of numerous low-skill (e.g., nail technician or barber) and high-skill (e.g., architect or geologist) jobs that could give formerly incarcerated individuals a means for supporting themselves and their families.

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.