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The rise of flexible employment has reshaped labor markets, increasing economic precarity and destabilizing traditional social institutions (e.g., Wacquant, 2009). Recent findings suggest that while higher rates of flexible employment correlate with increased incarceration rates for women, welfare generosity does not significantly reduce incarceration, raising questions about the role of welfare conditionality in shaping economic insecurity and punitive control (Vasiliev, 2024). Drawing on institutional anomie theory (Messner & Rosenfeld, 2012) and the decommodification hypothesis (Esping-Andersen, 1990), we test whether unconditional welfare (e.g., Medicaid, SSI) reduces economic dependency and buffers against the criminogenic effects of labor precarity, while conditional welfare (e.g., TANF with work requirements) reinforces labor commodification, increasing incarceration risks (Wacquant, 2009). Using a hierarchical modeling approach, we analyze macro-level data on incarceration rates, flexible employment, income per capita, and welfare participation. This study extends IAT by assessing how welfare structures influence the relationship between economic precarity and incarceration, offering a novel framework for understanding the institutional balance between labor markets, social protections, and punishment.