15522: Criminal Justice System and Self-Employment: From Criminal History to Entrepreneurial Activity (session 26143)

This study examines the hypothesis that interaction with the criminal justice system (CJS) increases self-employment as a measure of entrepreneurial activity. We argue that individuals with past criminal convictions face systemic barriers to wage employment, such as mandatory disclosure requirements, employer biases, and social stigma. These challenges, coupled with lower levels of human capital, often make self-employment a viable alternative. Using data from the United States, this paper explores the relationship between self-employment and the CJS, considering demographic factors like race, gender, and age. The findings reveal that individuals with criminal records are more likely to pursue entrepreneurial ventures, but this relationship varies among different demographic groups. Older individuals, particularly those aged 45-59, are consistently more likely to pursue self-employment, while racial disparities show a stronger response among white and Hispanic individuals. Additionally, gendered differences emerge, with men being more affected by convictions and women leveraging arrests as opportunities for entrepreneurial ventures. While self-employment offers autonomy and economic participation, it often reflects structural labour market failures rather than a deliberate pursuit of entrepreneurship. This research contributes to labour market theories by situating self-employment within the context of economic exclusion and resilience. It also informs policy interventions aimed at supporting ex-offenders through vocational training, entrepreneurial financing, and reducing employer discrimination. The findings further call for targeted programs to address racial and gender disparities, mitigate barriers to formal entrepreneurship, and integrate entrepreneurial training into education and re-entry initiatives. By emphasizing the duality of self-employment as both an opportunity and a necessity, the study calls for frameworks to promote inclusive and equitable labour markets.

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