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The economic effects of prison closures on local communities

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  • Chirakijja, Janjala

Abstract

This study examines the economic impacts of prison closures on local communities in the United States during the early 2010s. Using a difference-in-differences design, my analyses reveal a significant reduction in public-sector employment and a greater impact on low-skilled workers. However, I find little evidence of an adverse spillover effect on private-sector employment. Consequently, the overall implications of prison closures on the broader labor and housing markets are modest.

Suggested Citation

  • Chirakijja, Janjala, 2023. "The economic effects of prison closures on local communities," Economics Letters, Elsevier, vol. 228(C).
    • Handle: RePEc:eee:ecolet:v:228:y:2023:i:c:s0165176523001805
    DOI: 10.1016/j.econlet.2023.111155
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    References listed on IDEAS

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    1. Faggio, Giulia & Overman, Henry, 2014. "The effect of public sector employment on local labour markets," Journal of Urban Economics, Elsevier, vol. 79(C), pages 91-107.
    2. Anita Mukherjee, 2021. "Impacts of Private Prison Contracting on Inmate Time Served and Recidivism," American Economic Journal: Economic Policy, American Economic Association, vol. 13(2), pages 408-438, May.
    3. Gregory Hooks & Clayton Mosher & Shaun Genter & Thomas Rotolo & Linda Lobao, 2010. "Revisiting the Impact of Prison Building on Job Growth: Education, Incarceration, and County‐Level Employment, 1976–2004," Social Science Quarterly, Southwestern Social Science Association, vol. 91(1), pages 228-244, March.
    4. Imbens,Guido W. & Rubin,Donald B., 2015. "Causal Inference for Statistics, Social, and Biomedical Sciences," Cambridge Books, Cambridge University Press, number 9780521885881.
    5. Matthew J. Notowidigdo, 2020. "The Incidence of Local Labor Demand Shocks," Journal of Labor Economics, University of Chicago Press, vol. 38(3), pages 687-725.
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    More about this item

    Keywords

    Prison; Local economy; Public-sector employment; Spillover impact; Local demand shock;
    All these keywords.

    JEL classification:

    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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