The Economic Impacts of the Prison Development Boom on Persistently Poor Rural Places

Prison construction experienced explosive growth over the 1980s and 1990s. Many poor rural communities invited prisons into their environs, anticipating jobs and economic development. However, with one notable exception, no ex post empirical studies exist of the economic effects of prison construction on rural counties. Following an extensive review of the literature, this research uses a quasiexperimental control group method to examine the effect of state-run prisons constructed in rural counties between 1985 and 1995 on county earnings by employment sector, population, poverty rate, and degree of economic health. Analysis suggests a limited economic effect on rural places in general, but may have a positive impact on poverty rates in persistently poor rural counties, as measured by diminishing transfer payments and increasing state and local government earnings in places with relatively good economic health. However, there is little evidence that prison impacts were significant enough to foster structural economic change.