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The Incarceration Penalty and Black-White Economic Inequality: The Case of Baltimore

Author

Listed:
  • Lauren Russell
  • Jorge N. Zumaeta
  • Aaron Colston
  • William A. Darity Jr.

Abstract

This paper investigates income and wealth gaps by household incarceration history within and across racial groups using the Blinder-Oaxaca decomposition. We study this in the context of 2017 Baltimore. We find that households exposed to incarceration have lower levels of income and wealth and that these differences are largest for White households. Additionally, we find that Black households without incarceration exposure fare no better in household income than White households with exposure but have higher levels of wealth (driven by lower debt levels). These results highlight the importance of studying the relationship between the criminal legal system and economic inequality.

Suggested Citation

  • Lauren Russell & Jorge N. Zumaeta & Aaron Colston & William A. Darity Jr., 2023. "The Incarceration Penalty and Black-White Economic Inequality: The Case of Baltimore," AEA Papers and Proceedings, American Economic Association, vol. 113, pages 456-461, May.
    • Handle: RePEc:aea:apandp:v:113:y:2023:p:456-61
    DOI: 10.1257/pandp.20231132
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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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