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The economic effects of prison closures on local communities

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  • Chirakijja, Janjala

Abstract

This study examines the economic impacts of prison closures on local communities in the United States during the early 2010s. Using a difference-in-differences design, my analyses reveal a significant reduction in public-sector employment and a greater impact on low-skilled workers. However, I find little evidence of an adverse spillover effect on private-sector employment. Consequently, the overall implications of prison closures on the broader labor and housing markets are modest.

Suggested Citation

  • Chirakijja, Janjala, 2023. "The economic effects of prison closures on local communities," Economics Letters, Elsevier, vol. 228(C).
    • Handle: RePEc:eee:ecolet:v:228:y:2023:i:c:s0165176523001805
    DOI: 10.1016/j.econlet.2023.111155
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    References listed on IDEAS

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    1. Faggio, Giulia & Overman, Henry, 2014. "The effect of public sector employment on local labour markets," Journal of Urban Economics, Elsevier, vol. 79(C), pages 91-107.
    2. Matthew J. Notowidigdo, 2020. "The Incidence of Local Labor Demand Shocks," Journal of Labor Economics, University of Chicago Press, vol. 38(3), pages 687-725.
    3. Anita Mukherjee, 2021. "Impacts of Private Prison Contracting on Inmate Time Served and Recidivism," American Economic Journal: Economic Policy, American Economic Association, vol. 13(2), pages 408-438, May.
    4. Gregory Hooks & Clayton Mosher & Shaun Genter & Thomas Rotolo & Linda Lobao, 2010. "Revisiting the Impact of Prison Building on Job Growth: Education, Incarceration, and County‐Level Employment, 1976–2004," Social Science Quarterly, Southwestern Social Science Association, vol. 91(1), pages 228-244, March.
    5. Imbens,Guido W. & Rubin,Donald B., 2015. "Causal Inference for Statistics, Social, and Biomedical Sciences," Cambridge Books, Cambridge University Press, number 9780521885881.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Prison; Local economy; Public-sector employment; Spillover impact; Local demand shock;
    All these keywords.

    JEL classification:

    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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