Ensuring Economic Success for Formerly Incarcerated Coloradans

Introduction

Employment is crucial to successful re-entry for citizens returning to communities after being released from prison. Upon release, formerly incarcerated people often have few resources to get by while they are seeking employment. They struggle to find work because of criminal stigma, low education levels, and work history gaps. 

Supporting formerly incarcerated individuals upon their re-entry helps ensure they can take part in the activities needed for employment, such as resume preparation and learning job search skills. 

One key to improving the likelihood of employment post-incarceration is to ensure returning citizens have adequate financial resources and support to address their immediate needs and allow a focus on gaining employment.

Moving more formerly incarcerated people into the workforce presents a massive opportunity for the state. Not having these individuals in the workforce is a lost opportunity for both employers and the state and increases the likelihood they will return to prison or will be rearrested, adding to the cost burden for the state.

Key Findings 

• Formerly incarcerated people are 24% less likely to return to prison when they have acquired new skills and maintained employment during incarceration.
•  An estimated 6,000 individuals are released from Colorado prisons annually, a number that is roughly equivalent to 20% of the new entrants that are added to the state workforce each year. This number is also 1.5 times larger than Cherry Creek High School, the largest high school in the Denver area.   
• Breakthrough, a Colorado nonprofit that works with formerly incarcerated individuals, has helped those citizens achieve a 94% employment rate after their release. If Breakthrough’s results could be replicated for all applicable individuals exiting prison, 2,400 more individuals would be employed among each annual prison release cohort. Together those 2,400 individuals would contribute to GDP growth totaling more than $1 billion and a $650 million increase in personal income.
• Colorado’s current 3-year recidivism rate is 28%. Reducing that rate to Breakthrough’s 6% rate would save the state an estimated $55 million annually in recidivism-related costs, realized after the three-year recidivism measurement period.
• Inmates working in Colorado’s prisons earn just dollars per day. Marginally increasing the income inmates can earn while working in prison and on work release programs could help reduce the financial burden to the state through decreased public benefit use and lower recidivism rates.
• There is a strong connection between employment and lasting economic benefits for formerly incarcerated individuals.
• Colorado currently lacks any data to capture the outcomes, particularly the employment and earnings outcomes, of former inmates. This deficit makes it difficult to gauge the success of post-release programs.
• Over the 5-year period prior to the COVID-19 pandemic, more than half of those who recidivated went back to prison because of technical violations such as possessing a firearm or failing to report to a parole officer, not commission of new crimes.

Employment for Returning Citizens

Employment is a critical component of successful re-entry into the community after release from incarceration. A study by the Institute of Politics at the John F. Kennedy School of Government found a lack of employment was one of the most significant risk factors affecting successful re-entry. Researchers also found community organizations that offer returning citizens assistance with employment were most successful when they provided a holistic approach that included both training and job placement and emphasized high quality jobs with upward mobility potential. 

Positive benefits of employment include decreased reliance on state assistance, increased self-esteem, a more positive sense of identity, and a life made more stable because of income. 

Employers also benefit from successful reentry. Hiring formerly incarcerated individuals expands hiring pools at a time when businesses report difficulty finding talent, provides evidence of nondiscriminatory hiring practices, and creates potential tax credit and free bonding service opportunities. Additionally, employers could reduce training costs by hiring individuals who received training while incarcerated.

Unfortunately, research shows a felony conviction or incarceration makes individuals significantly less employable. After release, finding a job can take six months or more. Providing resources for released individuals to get and keep a job decreases the risk of recidivism because it ensures these citizens are meeting the requirements of parole, contributing to their households, paying off fines or making restitution, and forming the prosocial connections that discourage re-offending.

National data shows more than 27% of formerly incarcerated people are unemployed, a number that is higher than the U.S. unemployment rate at any time in history, including the Great Depression. Unemployment is worse for women than men, particularly for formerly incarcerated black women, whose unemployment rate is 43.6%.

There is a clear connection between unemployment and likelihood to engage in crime. One study found that, among unemployed men in their 30s, more than half had been arrested or convicted of a crime. Additionally, it is important to remember the unemployment rate only measures people who are actively looking for work and does not include discouraged workers who have stopped looking for jobs. When these individuals are included in the calculation, the jobless rate reaches closer to 60%.

Costs of Incarceration in Colorado

The annual per-person cost of incarceration in Colorado varies by the level of security in each facility, but in FY 2022, the average for all types of institutions was $56,766, or $69.72 per day. 

The annual budget for the Colorado Department of Corrections (CDOC) is $1.17 billion for FY 2025, roughly 2.7% of the state’s total budget. Figure 1 shows the CDOC’s budget over the last several years and its share of the state’s total operating budget. 

Figure 1

In FY 2022, 15,862 people were incarcerated in Colorado. Each year, about 6,000 people are released. Of those released in FY 2022, 86% were men, 48.3% were white, 31.6% were Hispanic, and 14.3% were black. Almost three quarters, 73.5%, were between the ages of 30 and 59, with only 21.5% between 20 and 29 years old. 

Figure 2

Source: FY 2022 Colorado Department of Corrections Annual Report 

The majority of individuals in prison are prime–working-age men. A previous report for this fellowship examined the decrease in labor force participation for this group and its impact on Colorado’s employment and GDP. That report established the importance of employment for all prime–working-age men in the state. 

The 6,000 individuals who are released from prison annually could have a measurable impact on the labor market. Over the last three years, Colorado’s labor force grew by a total of 30,000 people annually. While not every person returning from prison will enter the labor force, the total number of individuals returning from prison is equivalent to about 20% of the current growth in Colorado’s labor force.

Given that such a high proportion of people released from prison in the state are of prime working age, the potential for real economic impact is high. Efforts to support the employment of formerly incarcerated individuals are not only integral to the economic success of these individuals and their families, they could decrease the risk of recidivism and positively impact the state’s entire economy and the state budget.

Recidivism in Colorado 

For the 10-year period prior to the COVID-19 pandemic, the average 3-year recidivism rate in Colorado was 45.4%. Across the United States, the 3-year rate in 2021 was 38.6%. Those individuals who were able to maintain employment for one year post-release had a recidivism rate of 16%. It is worth noting that formerly incarcerated individuals were 24% less likely to return to prison when they acquired new skills and maintained employment during their incarceration. 

Not everyone who recidivated committed new crimes. A significant portion—an average of 55% between 2015 and 2019—returned to prison because of technical violations. Technical violations are not considered new crimes, but lead to returns to prison because conditions of parole or probation have been violated. Missing a check-in with a parole officer or failing a drug test are examples of technical violations. 

Stable employment is key to reducing recidivism. This statement holds true regardless of what the individual’s work and criminal history looked like before incarceration. Education, training, and employment while incarcerated helps with employment success after release, ultimately reducing the likelihood of returning to prison.

Resources for Re-entry

Colorado prisons offer education and skill development programs for eligible inmates and work opportunities through Colorado Correctional Industries. The Take Transitional Work Opportunity (Take TWO) program temporarily allowed for work release. Take TWO has been paused, but CSI’s research will show that, by providing opportunities for education, training, and employment while inside, these programs increase the likelihood of each inmate successfully securing employment upon release. 

Earning a wage while still incarcerated provides additional benefit by allowing prisoners to begin to pay down restitution and fines and set aside some money to be used for their own re-entry expenses. A 2022 law mandated prisoners participating in the Take TWO program receive the state’s minimum wage. Before the program was paused, it employed roughly 100 inmates, a fraction of the state’s prison population of 15,900. With the discontinuation of this program, unfortunately no prisoners in Colorado receive the minimum wage for their work while incarcerated. 

Most states provide “gate money” to formerly incarcerated individuals upon release from prison. In Colorado, former inmates receive $100, the second highest amount in the country. Still, this sum is generally insufficient to address the vast needs former inmates have—food, housing, clothing, hygiene supplies, technology, transportation, and more—until they can secure employment and receive their first paychecks. 

Breakthrough: A Case Study on Improving Post-incarceration Outcomes in Colorado

There are numerous organizations in Colorado that provide pre- and post-release support for formerly incarcerated individuals. These programs create the foundation for work by providing connections to:

• Job training 
•  Housing
• Basic needs such as food and hygiene items
• Transportation
• Technology, including a cell phone to communicate with prospective employers, or access to computers for job applications

Because successful re-entry requires formerly incarcerated individuals to find a job relatively quickly upon release, these organizations provide tremendous economic impact by providing structure and support for people exiting prison. 

One successful organization is Breakthrough, a Colorado-based nonprofit organization focused on supporting incarcerated individuals as they transition back into society. Established in 2017, the organization offers a structured 8-month in-facility educational curriculum that includes training in job readiness and re-entry planning. 

In addition to its in-facility programming, Breakthrough offers post-release services aimed at supporting individuals as they re-enter their communities. These services include career coaching, job placement assistance, and access to mental health and substance abuse resources. The organization also offers an alumni network that provides continued guidance and accountability.

Breakthrough operates in five Colorado correctional facilities: Arkansas Valley Correctional Facility, Centennial Correctional Facility, Colorado State Penitentiary, Skyline Correctional Center, and La Vista Women’s Correctional Facility. The group serves roughly 30 individuals per facility annually and, as of February 2025, has served 535 people since its founding 8 years ago. 

In 2023, Breakthrough reported that, among its lifetime cohort, 92% were employed and only 6% recidivated. The recidivism rate fell to 1% for participants who completed both pre- and post-programming. 

These results significantly beat state and national averages without intervention.

According to most recent data from CDOC, formerly incarcerated individuals released in Colorado recidivated within three years of release at a rate of 28%, nearly five times the rate of those who received any form of Breakthrough services. It is important to note that Colorado’s recidivism rate has typically hovered around 45%. A steep decline in the number of technical-violation returns since the COVID-19 pandemic has driven a decline in overall recidivism. While there are no current data to inform on the employment rate of former prisoners in Colorado, national data suggest that only 35–40% become reliably employed after release, a number that is roughly one-third to one-half Breakthrough’s employment rate.

Economic Modeling of Breakthrough’s Potential 

Employment Modeling

CSI examined the potential positive economic impact if Colorado’s annually released prison population of 6,000 could achieve post-incarceration success at the rates of Breakthrough participants. 

Reaching an employment rate of 92% among formerly incarcerated at such a large scale is a difficult proposition, but data show that prime-age formerly incarcerated individuals are employed or looking for work at a rate of more than 93%, 10 percentage points higher than their peers who were never incarcerated. 

To estimate the potential benefit to Colorado, CSI modeled the additional number of those formerly incarcerated individuals who would have a job if the state could reach the Breakthrough employment rate. 

As of June 2023, roughly 6,000 individuals are released from Colorado prisons each year. CSI did not use a portion of this group for modeling, however, since Breakthrough only accepts participants with at least a high school education. Using this criterion, more than a quarter (28.4%) of the 6,000 released individuals would not be eligible for the proposed rate-increase model, leaving 4,300 applicable individuals. 

CSI used REMI, an economic modeling software, to estimate the positive impacts to Colorado if more formerly incarcerated were employed. The range used for this exercise had a lower bound that assumed that 40% of individuals released each year are employed on average in Colorado, and an upper bound that assumed just 35% are employed. Replacing this state average rate with Breakthrough’s employment rate of 92% and applying it to the applicable annual cohort revealed that between 2,234 and 2,449 additional formerly incarcerated would be employed if they had access to a program like Breakthrough.

Figure 3

The economic impact of an additional 2,234 to 2,449 individuals newly employed is subject to multiplier effects, meaning that, when modeled, these individuals would create an outsized impact on Colorado’s economy. 

CSI estimates that applying Breakthrough’s employment outcomes could lead to a total of 6,800 to 7,500 new jobs in the state, a number that is equivalent to the population of Aspen. These individuals also would generate GDP growth of more than $1 billion and help fuel a $650 million increase in personal income. 

In addition to employment services offered to Colorado's unemployed, groups such as Merit America also assist with upskilling workers currently in low-income jobs. To date, the organization has produced over $1 billion in wage gains for low-income workers and has served over 14,000 program participants. Employing and upskilling workers benefits both individuals and the state. Increased earnings, whether through upskilling or securing employment after a period of unemployment, boost Colorado’s tax revenue through payroll taxes. This revenue helps to fund services such as unemployment insurance.

Recidivism Modeling

CSI also modeled the potential state savings on incarceration costs in a similar analysis that swapped the state’s 2020 3-year recidivism rate of 28% with Breakthrough’s rate of just 6% for the applicable annual cohort of 4,300. The model assumed each individual who reoffends returns to prison for at least one year. 

Using data from the CDOC, the inflation-adjusted cost to incarcerate an inmate for one year in a Colorado prison is $58,265. 

Figure 4

*Breakthrough’s recidivism rate is an ongoing calculation of all former program participants

Inmates reoffending at a rate of just 6% compared to Colorado’s current 3-year rate of 28% would result in a decrease from 1,203 to 258 individuals recidivating within 3 years of release among each cohort, a decline of 79%, or 945 individuals. The cost savings to Colorado due to 945 fewer individuals being incarcerated is over $55 million annually. 

Solutions for Re-entry Success

Encourage education and training while incarcerated

Colorado prisons offer a wide variety of education and training opportunities for incarcerated individuals, including support for gaining high school equivalency, career and technical education such as automotive and culinary arts, apprenticeship programs, and post-secondary education. 

HB23-1037 allows inmates sentenced for nonviolent felony offenses to deduct time from their sentences for each accredited degree or other credential awarded by institutes of higher education while the inmates are incarcerated. For example, one year of earned time is awarded to an individual who receives an associate or baccalaureate degree. A foundation of education and/or training improves the likelihood of employment success after release and should be encouraged for those incarcerated.

Provide greater opportunities to earn while incarcerated

As noted previously, CDOC began a work release program in 2019 called Take TWO. Incarcerated adults had to be within 16 months of the parole eligibility date, or within 12 months of their mandatory release date, and deemed to be low- or moderate-risk to participate. Those convicted of violent crimes were ineligible. Typically, inmates who entered the program had earned their high school diploma or equivalency, had previous work experience, and had completed other programming within the CDOC. 

Incarcerated individuals were hired by employers in the community and earned prevailing market wages while working each day and returning to their correctional facilities after their job. The program enabled participants to save larger amounts of money to help pay restitution and fines and have funds to increase their stability post-incarceration, including by more easily securing housing. The program was paused in 2022, but, during its existence, 272 people participated. Not one participant paroled during participation returned to prison. 

Colorado Correctional Industries (CCI) also offers work opportunities. Created by the legislature in 1997, CCI’s purpose is to create profitable businesses inside prison facilities. Some incarcerated workers can work in a CCI business dependent on their inmate statuses, and the businesses range from metal manufacturing and a sign shop to dog training, coffee roasting, and printing services. In FY 2022, CCI generated $24 million in product sales.

Per statute, any wages an individual earns while incarcerated must be garnished 20% to pay any outstanding restitution, fines, or fees. Depending on the wage earned—CCI jobs do not tend to pay market wages—this program can allow inmates to have some money set aside upon release.

Allowing individuals to earn wages while incarcerated can be a more effective and equitable approach than providing a cash stimulus upon release because the policy empowers individuals to develop skills, build savings, and establish senses of financial responsibility. In this way, these programs reflect the goals of recent initiatives like Colorado's “Returning Citizen Stimulus” program, which provided $2,250 to $2,750 to individuals upon release.

However, the current incarceration environment in Colorado doesn’t allow for an answer as straightforward as simply allowing inmates to work. The number of available jobs is less than the number of individuals incarcerated. In 2022, just 5% of inmates were employed through CCI.

Funds for people enrolled in workforce programs upon release

The Center for Employment Opportunities (CEO) offered the Returning Citizen Stimulus between April 2020 and April 2021 when prisons accelerated releases during the pandemic. The program provided immediate financial support over three months to 10,400 people, offering between $2,250 and $2,750 to formerly incarcerated individuals depending on the cost of living in the area of release. Payments were split into three tranches and to be eligible for all of them, recipients had to achieve agreed upon milestones such as creating a resume and going through a job training workshop.

CEO conducted a study to analyze the program’s impact. It found the money was used for rent, food, clothing, and other items to prepare for employment. 60% of recipients reached an employment milestone after receiving the funding. 

For individuals who are unable to generate earnings while inside prison, some support may be necessary to ensure successful re-entry. While the Returning Citizen Stimulus helped recipients meet immediate needs such as rent, food, and clothing, it sparked debates about fairness, particularly when other struggling citizens did not receive similar support. By enabling incarcerated individuals to earn and save while in prison, the state could aid reintegration, reduce recidivism, and improve financial security while shifting narrative from dependency to empowerment.

Address data issues to support pathways to employment

In preparing this report, CSI confronted a lack of available state level data about employment and long-term outcomes for formerly incarcerated individuals. Real-time data and data sharing across departments within the state, including between the CDOC and the Department of Labor and Employment, will be crucial to understanding and addressing the challenges faced by formerly incarcerated Coloradans. The collection of adequate data will be critical in proving a positive return on investment. 

The nonprofit organization Recidiviz has created a criminal justice data platform to help leaders use data to help improve re-entry success. The CDOC is currently working with Recidiviz to improve its data in an effort to reduce incarceration. 

Bottom Line

Each year in Colorado, an estimated 6,000 individuals return to communities after being incarcerated, equivalent to 20% of Colorado’s annual average labor force growth of 30,000 over the last three years. The vast majority of those returning hope to work, but are unable to find adequate employment. This outcome can lead to increased reliance on public benefits and higher recidivism rates, both of which increase the cost burden to Colorado. 

There is a strong economic incentive to ensuring that people released from prison become productive members of society. Breakthrough and other organizations working to ensure formerly incarcerated individuals succeed post-release have shown that, with the proper support and investment, former prisoners can meaningfully contribute to society and help the state reduce costs. 

Allowing inmates to earn even a fraction of the minimum wage while working in prison could help thousands of people accumulate some level of savings before being released. Inmates enrolled in the Take TWO program briefly earned minimum wage before the program was paused. Extra money could allow formerly incarcerated individuals to focus on finding gainful employment rather than being released into economic hardship. By allowing inmates to earn a meaningful wage while incarcerated and supporting them on the path to employment once released, the state could save taxpayer dollars, increase economic growth, and expand talent pools for businesses struggling to find workers.