Modern American Incarceration and Labor Economics

Abstract

Many individuals in the United States are incarcerated. The American incarceration rate and average sentence length have risen dramatically since the early 1980s. It is commonly hypothesized that mass incarceration has had various unintended consequences on individuals, households, and society at large. In this dissertation, I examine the effects of an individual's incarceration on several economic variables, including educational attainment, employment, and earnings. Over the course of three essays, I utilize the theoretical background and empirical methodology of contemporary labor economics to establish links between the experience of incarceration and generally negative subsequent outcomes. Each chapter draws on data from the 1979 cohort of the National Longitudinal Survey of Youth, which allow me to examine the varying life courses and behaviors of a subsample of individuals that are incarcerated at some point during adulthood.

The first chapter of this dissertation investigates the long-term effects of parental incarceration on children. I utilize detailed intergenerational data and a variety of empirical methods to provide evidence that individuals who report resident parental incarceration during childhood experience depressed levels of educational attainment and earnings as an adult. These effects appear to vary by parent and child gender. The second chapter is concerned with estimating the returns to education attained after an incarceration spell. I analyze longitudinal individual histories of incarceration, education, employment, and earnings for a sample of former prisoners using regression and propensity score matching techniques. My results suggest that education has a positive effect on post-release labor supply and earnings, but this benefit is largely confined to the completion of four-year college degrees. The third and final chapter reevaluates the negative relationship between incarceration and earnings found in the current empirical literature. I extend this literature with a battery of quantile regression models. My results clarify incarceration's effect on subsequent low earnings and suggest that the incarceration wage penalty is smaller in magnitude for low-skill, low-earnings employment. In total, this dissertation extends the current understanding of incarceration's effects on individuals and households, particularly with respect to performance on the market for labor. Each essay also provides some insight into the effectiveness of American criminal justice policy.