Incentives and the Use of Prison Labor

Abstract

The current use of inmate manpower by correctional institu tions is a compromise between the inclinations of correctional officials and the preferences of society and thus achieves the ob jectives of neither group. Instead it imposes costs on inmates in the form of poor incentives and irrelevant jobs and creates an oversupply of labor for administrators. Private industry and labor are not truly protected from competition by prison industries, but prohibiting the sale of prison-made goods causes society's overall allocation of resources to be inefficient.