A "radical transformation" of prison regimes in England and Wales is needed to ensure inmates are prepared for life after release, says a new report.
Over 1, 000 inmates kept diaries as part of the inquiry's research
A "disturbingly high" number of inmates are locked in cells in overcrowded jails instead of doing useful work, the report by a committee of MPs states.
The report, published on Friday, calls for prisoners to carry out real work on a nine-to-five basis.
The House of Commons Home Affairs Committee produced the document.
The committee's chairman, former Home Office Minister John Denham, said: "There needs to be a far greater emphasis within prisons on 'real life' work if we are to stem re-offending."
He added: "For many prisoners, experience of a normal working day will be a new experience. However, our inquiry has shown that this is vital if we are to try and prepare offenders for life after prison.
"Ex-prisoners with stable jobs and lifestyles are far less likely to re-offend."
The report also calls for much greater use of day-release schemes to allow them to work in the community and more opportunities for education and training.
It suggests effective rehabilitation would help to cut the rate of re-offending, which currently sees almost 60% of inmates reconvicted within two years of release.
The committee recommended pilot schemes to assess whether prisoners could be paid a full market rate for their work in jail workshops, in order to help foster the work ethic.
It was "indefensible" that the Prison Service could not find enough work or purposeful activity for prisoners, the MPs said.
They criticised the government for giving "low priority" to work schemes in jail.
More than 1,000 prisoners completed diaries detailing their experience of life behind bars as part of the committee's year-long inquiry.
The report called for private firms and local communities to be involved in providing work and training opportunities for inmates prior to release.
Prison Minister Paul Goggins said: "I very much welcome this report.
"Reducing re-offending is the central priority of the National Offender Management Service and I am delighted that the committee has confirmed that the policy framework is now in place."
He added: "I will give careful consideration to all the committee's recommendations and look forward to responding to their suggestions. "
Meanwhile, Juliet Lyon, the director of the Prison Reform Trust, said solutions to reducing re-offending "lie outside the prison gate with properly-resourced mental health, drug and alcohol treatment".
She added that education and training programmes as well as social housing and financial support services were also crucial in the rehabilitation process.
But Shadow Home Secretary David Davis criticised the government's prison record.
He said: "The prison system is a complete shambles and the committee's report is a damning indictment of the Home Office."
He added: "The government has had seven years to deal with the problem of overcrowding.
"Instead they have ignored prison population projections and not built enough prisons, ultimately putting the public at risk by releasing those who have not undergone proper rehabilitation."