Yes, bro. Some way will ultimately amount to the 'best' way. To begin with, we absolutely cannot consider the interests of any profiteer when it comes to locking up our citizens. It's one of those places where it is absolutely inappropriate and downright dangerous.
Education. Take everything you were saying about the value of seeing a job well done, and compel them to do the work on themselves. It will serve them right, literally.
Here, we have the idea of a financial offer to delay or decline reproduction. An absolutely perfect remedy for this particular brand of bad parenting.
Unfortunately, in a capitalist society, profitability WILL and ALWAYS come into play...it is unvoidable. I understand your concerns, but many have forfeited their rights to be normal citizens, they must earn their right to be accepted back into mainstream society. Recidivism is a huge problem, but the current "business" model for the Judicial encourages it...politicians encourage it, and their is a huge support system that encourages it.
Work on themselves? You don't deal with criminals do you? Their job description is being a criminal, their resume reflects this...you cannot compel people to work on themslves, they must compel themselves, and only a few do so...and why should they if they have in their minds that they are benefitting from being a criminal?
Paying people to not produce or delay? And you were talking about someone making a profit? Who pays for this? And why should one pay people do that? It is common knowledge that poor people have lots of kids, the Catholic Church knows this, and encourages this. Look at the most Catholic country in the world, Brazil...look at all those people in the favela..poor people.
No, that idea is right up with paying kids to get good grades...no they and others must be inspired to do better. Inspiration comes in many forms, an ideal, or a leader, or from oneself.