Rebranding Ex-convicts

We develop a theoretical model explaining how the problem of poor labor market outcomes for ex-convicts might be alleviated by a government intervention. While employers wish to avoid associating with those who will end up returning to crime, they cannot be certain from the available information which convicts will reoffend and which will not. We illustrate that, notwithstanding this informational asymmetry, a government can nevertheless design a costly, yet net socially beneficial program through which some ex-convicts can credibly convey their good intentions to employers. Such a “rebranding” program can help more ex-convicts find legitimate work, with fewer electing to return to crime than would otherwise have been the case.