Community-based sentencing and labour market outcomes: evidence from New Zealand’s 2007 sentencing reform

New Zealand’s October 2007 sentencing reform expanded alternatives to short-term imprisonment. Using linked court and tax records, we estimate how the shift towards home detention, community detention, and intensive supervision affected offenders’ labour market outcomes. Our triple-differences design compares affected cohorts sentenced just before and after the reform and nets out contemporaneous labour-market changes using offenders with monetary sentences. Earnings and employment rise meaningfully in the first six months after sentencing. Employment effects fade to near zero by around eight months, but earnings remain higher and are still visible up to ten years after sentencing, averaging about 2.5 per cent of counterfactual earnings per month.