Becker Friedman Institute
for Research in Economics
The University of Chicago

Research. Insights. Impact. Advancing the Legacy of Chicago Economics.

The Policies Behind the Prison Boom

Economists’ Careful Data Analysis Reveals Impact of Punitive Sentencing

The number of people incarcerated in the United States jumped fivefold between 1970 and 2013. Today, the U.S. incarcerates more than 700 out of every 100,000 of its citizens; more U.S. citizens live behind bars than in any other nation in the world, including China and Russia.

Furthermore, the racial inequality of the makeup of the prison population raises serious questions about the presence of profound bias in the system. Data from the U.S. Census shows blacks make up 37.7 percent of the prison population – but only 13 percent of the general populace. Blacks are incarcerated at a rate per 100,000 five times higher than whites are and Hispanics at twice the rate.

How did the U.S. arrive at this situation, and what is the source and impact of this racial disparity? Derek Neal, a professor of economics at the University of Chicago, and coauthor Armin Rick of Cornell University investigated these questions and came up with a more rigorous method for cleaning and examining notoriously unreliable prison data. This produced fresh insights into why the prison population skyrocketed and how racial injustice may be operating within the system. Their findings are outlined in a forthcoming paper in the Journal of Legal Studies.

Many observers have long suspected that tougher sentencing laws—introduced in the 1970s and largely still in effect today—were driving the prison boom. Neal and Rick found that a broad shift toward more punitive sentences for every category of crime—combined with a higher probability that those who were arrested would serve prison time—did indeed drive the surge in U.S. prison population over the past three decades.

The tougher sentencing occurred across all states, even though each state varied in its approach. The finding was also not isolated to any specific sentencing policy, type of crime, or class of offenders.

“This is not just the war on drugs. It’s not just being tough on violent criminals,” said Neal. “It is across the board; whatever you were arrested for, you could expect a much higher probability of entering prison and a much longer prison sentence in 2000 than in 1985.” (One exception was murder, Neal notes; the probability of entering prison did not increase much, but the offenders stayed in prison much longer.)

“As a good round number, something between two-thirds and four-fifths of the prison growth that we saw is likely due to changes in how punitive we were to people who were arrested,” said Neal.

The Role of Race

Neal also argues that it does not appear that the changes in the sentencing laws were targeted at black offenders more than white. These across-the-board, more punitive sentences led to longer stays in prison for every arrested offender, regardless of race. However, Neal notes that the arrest rates of blacks has been four times that of whites for decades, which means the more punitive sentencing overall had an outsized effect on the black community.

Neal emphasized that tougher sentencing policies were introduced in what was a fairly “race neutral” way, but cautioned that his results cannot rule out racism at play in the system. “We are in no way saying that racism has nothing to do with why the black prison population is so large relative to the white prison population,” said Neal. It may be that racially-biased law enforcement patterns determined who was arrested for what and how they were sentenced and shaped the prison population at the study’s 1985 baseline, “but the changes from that baseline did not make things worse for black offenders relative to white offenders.”

Studies of incarceration trends and their economic impact are challenging because data collected about prisoners and the flows in and out of the penal system are “very messy,” Neal said. This is because almost 80 percent of all U.S. prisoners are held in state facilities, and the states vary widely in the reliability of the statistics they report.

In a key contribution to the field, Neal and Rick cleaned National Corrections Reporting Program data and ran several consistency checks to identify the states with most complete reporting. From this they focused on seven states with reliable data. They then matched this data with cleaned state-level arrest data to track trends in arrests and prison admissions.

Sound data on arrests, admissions, and releases based on specific crimes allowed them to see changes in prison populations and time served across states and model different outcomes. They held sentencing lengths steady from a baseline of 1985 and asked what the prison population would have been based on just the arrest data. They confirmed that the population would have been much smaller than the current one.

Neal hopes his work will clarify misconceptions about the relative size of the role federal and state policies played in prison population growth. According to Neal and Rick’s estimates, the federal war on drugs—with dramatically harsher penalties for those convicted for possession of crack cocaine, who tended to be black, than for drugs more commonly used by whites—sent approximately 20,000 black men to prison who might not otherwise have gone. But the picture in state prisons is worse.

Their calculations for the seven states in their cleaned data suggest that the black male population of 142,000 is 42.7 percent higher than it would have been under 1985 sentencing policies. Extrapolating that nationwide, their rough calculation adds up to 345,000 “additional” black men held in state prisons under the newer, more punitive sentencing laws.

“[The federal war on drugs] was wrong, and it was racist, and it was bad policy, but the across-the-board, more severe treatments in state courts for all arrested offenders had a much more devastating impact on black communities,” said Neal.

Economic Impact

In their paper, Neal and Rick also emphasize the dire economic impact of these policies for African American men. The high rates of imprisonment and criminal records, combined with a sharp drop in employment for black males in the Great Recession, have erased 40 years of economic progress. Most black men are no better off than they were just after the Civil Rights era.

Neal and Rick emphasize that their work follows and confirms previous studies—notably work by Steven Raphael of University of California-Berkeley—that show how sentencing policy contributed to prison growth. Their contribution of better data–verified with consistency checks—supports further inquiry into many remaining questions.

Neal believes the broader implications of these findings for policy remain unclear. There is much that needs to be understood about what drives the racial imbalance in the system. Also, more evidence is needed on the impact of harsher sentencing on crime rates. Early indications out of California suggest that there may be room to reduce the prison population without affecting crime rates. In that state, the Supreme Court demanded that the prison population be reduced due to overcrowding. It does not yet appear that the reduction in the prison population has led to a meaningful increase in crime

With states facing strained budgets and politicians and activists starting to speak up about the social and economic damage of locking up millions of Americans, Neal’s research comes at the right moment.

“What this might tell us is that there are ways around the edges that we can be less punitive, especially with non-violent offenders,” observes Neal. “We can save money on prisons, we can potentially direct some young men on a path that would be better for them in the long term than if they went to prison, and we can do so at maybe very little cost to public safety.”

Jennifer Roche