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The High Budgetary Cost of Incarceration

Author

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  • John Schmitt
  • Kris Warner
  • Sarika Gupta

Abstract

The United States currently incarcerates a higher share of its population than any other country in the world. We calculate that a reduction in incarceration rates just to the level we had in 1993 (which was already high by historical standards) would lower correctional expenditures by $16.9 billion per year, with the large majority of these savings accruing to financially squeezed state and local governments. As a group, state governments could save $7.6 billion, while local governments could save $7.2 billion. These cost savings could be realized through a reduction by one-half in the incarceration rate of exclusively non-violent offenders, who now make up over 60 percent of the prison and jail population. A review of the extensive research on incarceration and crime suggests that these savings could be achieved without any appreciable deterioration in public safety.

Suggested Citation

  • John Schmitt & Kris Warner & Sarika Gupta, 2010. "The High Budgetary Cost of Incarceration," CEPR Reports and Issue Briefs 2010-14, Center for Economic and Policy Research (CEPR).
  • Handle: RePEc:epo:papers:2010-14
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    File URL: http://www.cepr.net/documents/publications/incarceration-2010-06.pdf
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    References listed on IDEAS

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    1. Richard B. Freeman, 1991. "Crime and the Employment of Disadvantaged Youths," NBER Working Papers 3875, National Bureau of Economic Research, Inc.
    2. Harry J. Holzer & Steven Raphael & Michael A. Stoll, 2001. "Will Employers Hire Ex-Offenders? Employer Preferences, Background Checks, and Their Determinants," JCPR Working Papers 238, Northwestern University/University of Chicago Joint Center for Poverty Research.
    3. Holzer, Harry J., 2007. "Collateral Costs: The Effects of Incarceration on the Employment and Earnings of Young Workers," IZA Discussion Papers 3118, Institute for the Study of Labor (IZA).
    4. Holzer, Harry J & Raphael, Steven & Stoll, Michael A, 2006. "Perceived Criminality, Criminal Background Checks, and the Racial Hiring Practices of Employers," Journal of Law and Economics, University of Chicago Press, vol. 49(2), pages 451-480, October.
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    Citations

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    Cited by:

    1. Mitchell Polinsky, A., 2015. "Deterrence and the optimality of rewarding prisoners for good behavior," International Review of Law and Economics, Elsevier, vol. 44(C), pages 1-7.
    2. Florian Baumann & Tim Friehe, 2013. "Cheap Talk About The Detection Probability," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 15(01), pages 1-16.
    3. John Schmitt & Janelle Jones, 2012. "Long-term Hardship in the Labor Market," CEPR Reports and Issue Briefs 2012-09, Center for Economic and Policy Research (CEPR).
    4. Katherine Eriksson, 2015. "Access to Schooling and the Black-White Incarceration Gap in the Early 20th Century US South: Evidence from Rosenwald Schools," NBER Working Papers 21727, National Bureau of Economic Research, Inc.
    5. Cherrie Bucknor & Alan Barber, 2016. "The Price We Pay: Economic Costs of Barriers to Employment for Former Prisoners and People Convicted of Felonies," CEPR Reports and Issue Briefs 2016-07, Center for Economic and Policy Research (CEPR).

    More about this item

    Keywords

    incarceration; prison; jail; incarceration rates; budget deficit;

    JEL classification:

    • E - Macroeconomics and Monetary Economics
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H - Public Economics
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • K - Law and Economics
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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