Revisiting the Lasting Impacts of Incarceration

John Humphries, CŽcile Macaire, AurŽlie Ouss, Megan Stevenson and Winnie van Dijk
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John Humphries: Yale University
CŽcile Macaire: Yale University
AurŽlie Ouss: University of Pennsylvania
Megan Stevenson: University of Virginia Law School
Winnie van Dijk: Yale University

No 2441, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: Using newly-linked administrative and commercial data from Virginia spanning 25 years, we study the consequences of incarceration. While previous research has examined labor market outcomes and recidivism, we focus on two of the primary channels through which low-income households build wealth: asset ownership (homes and cars) and human capital formation. To identify causal effects, we use a matched differencein-differences design. In line with much of the literature on the impact of incarceration in the U.S., we find no evidence of scarring effects on labor market outcomes or changes in recidivism beyond the incapacitation period. However, we find that incarceration leads to a persistent reduction in asset accumulation: seven years after sentencing, homeownership has declined by 1.1 percentage points (12.1%) and car ownership by 2.7 percentage points (18.1%). Incarceration also lowers human capital formation, reducing college enrollment by 1.4 percentage points (15.1%).

Pages: 68 pages
Date: 2025-05-19
New Economics Papers: this item is included in nep-law
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