The study finds that first-time conviction reduces employment probabilities by 5 percentage points and has a significantly depressing effect on income (as much as -30 percent), especially for offenders whose pre-conviction jobs apparently require trust or who are sent to prison. Significant conviction effects on income are large compared with state-imposed penalties. The study briefly recounts relevant literature; describes the data used and measurement strategies; presents estimates of the conviction effect for first-time convicts; analyzes the causes of the conviction effect; compares findings with existing literature on job displacement; and compares the conviction effect with fines and imprisonment. This analysis finds large and significant effects of conviction on the employment probabilities and income of some Federal fraud and larceny offenders. The pattern of income effects appears to be based on stigma rather than factors such as stalled experience or job displacement. The effect of conviction on income is an important component of the punishment for offenders who are highly educated and whose jobs require trust. Offenders who do not work at jobs requiring trust do not appear to experience large or significant conviction effects. Footnotes, figure, tables, appendix, references