Jobless ex-offenders are twice as likely to return to jail
The government has been urged to save taxpayers' money by funding jobs for ex-offenders.
A report by the Policy Exchange think-tank says more than £300m a year could be saved if organisations were paid to hire people released from jail.
Pay-outs could go to private companies, public sector organisations and charities who took on ex-convicts.
Re-offending costs taxpayers in England and Wales £13bn a year, with jobless ex-offenders most likely to re-offend.
The report recommends organisations could get more money for employing ex-offenders who were "most difficult to place".
It notes unemployed ex-offenders are twice as likely to return to a life of crime, compared to those who find employment after leaving jail.
Arranging employment for the 66,000 people who are released from jail in England and Wales each year would save £300m, it says.
Co-author Ben Ullmann said: "Placing ex-offenders in employment is the key to tackling re-offending rates, reducing the high costs of crime and making communities safer.
"By using the structures already in place for welfare-to-work programmes, the government could take real strides in breaking the vicious cycle of crime and re-incarceration."
Business leaders and prison charities welcomed the proposals.
Susan Anderson, of the CBI, said: "The criminal justice system still needs to do more to help offenders turn around their lives and get back on the straight and narrow.
"Getting offenders into work on release should be the Government's number one priority."
The crime reduction charity Nacro said getting ex-offenders into jobs was "one of the best forms of crime prevention."
Nacro chief executive Paul Cavadino said: "The community benefits financially when ex-offenders become contributing, tax-paying members of society."
The right-of-centre Policy Exchange has been the subject of controversy when one of its reports described some northern British cities as "beyond revival".
It led Conservative leader David Cameron to distance himself from the think-tank, describing the report as "absolute rubbish".