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The Financial Consequences of Pretrial Detention

Author

Listed:
  • Pablo Slutzky
  • Sheng-Jun Xu

Abstract

In the United States, a significant number of criminal defendants are held in pretrial detention and face substantial financial burdens. Matching individual-level criminal case records to household-level financial data, we exploit the quasi-random assignment of court commissioners to study how pretrial detention affects household solvency. We find that pretrial detention results in higher rates of household insolvency, driven by higher rates of chapter 7 bankruptcies and judgment liens, and higher foreclosure rates during periods of decreasing house prices. We document that the effects spill over to family members and show that home equity can cushion households from insolvency.

Suggested Citation

  • Pablo Slutzky & Sheng-Jun Xu, 2025. "The Financial Consequences of Pretrial Detention," The Review of Financial Studies, Society for Financial Studies, vol. 38(11), pages 3329-3373.
    • Handle: RePEc:oup:rfinst:v:38:y:2025:i:11:p:3329-3373.
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    File URL: http://hdl.handle.net/10.1093/rfs/hhaf009
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    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • K35 - Law and Economics - - Other Substantive Areas of Law - - - Personal Bankruptcy Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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