Criminal Justice Involvement, Self‐Employment, and Barriers in Recent Public Policy

Abstract

Abstract This study provides the first empirical evidence on the extent of self‐employment within the U.S. justice‐involved population. Using linked tax return and Criminal Justice Administrative Records System data, we find that 28 percent of individuals with criminal records are self‐employed. Justice‐involved individuals are 22 percent more likely to rely solely on self‐employment. The Paycheck Protection Program, passed to support small business during the COVID‐19 pandemic, initially disqualified those with a broad range of criminal histories. We find that close to 3 percent of recent sole proprietors had observable PPP disqualifying events based on initial eligibility criteria, with a disparate impact on Black and Hispanic business owners.