A continuous-time, open-loop, multiperiod model of optimal participation in crime was used in the analysis. Theoretical effects of racial differentials in punishment and in employment were also explored. Tests and 'equal treatment' experiments were performed to determine the relative importance of employment and punishment in determining recidivism as well as to ascertain the importance of racial discrimination in employment and punishment in explaining racial differences in recidivism. A wide variety of personal background characteristics were found to be significant determinants of recidivism. Holding these and other variables constant, favorable preprison employment experiences were found to add little to the explanatory power of the model. The increased severity of punishment was determined to be a deterrent to crime; increased certainty of punishment was positively related to rearrest rates. Blacks were more prone to recidivism than whites, but treating blacks and whites equally in punishment did not reduce the racial gap in recidivism. The findings suggest that race differentials in labor markets may be systematically related to postpartum recidivism. Tabular data and eight references are included.