Social Sciences History Seminar

Abstract: The United States has both the largest prison population and one of the highest incarceration rates worldwide. Furthermore, the U.S.'s reliance on incarceration in criminal justice is not only a modern phenomenon but dates back to the late 19th century. An active literature seeks to understand the impacts of incarceration today on subsequent labor market outcomes, reaching mixed conclusions. In this paper, we trace the labor market trajectories of incarcerated vs. non-incarcerated individuals in the U.S. during the first major increase in incarceration, from 1870-1940. We build a new database on millions of inmates from full-count censuses and administrative state prison records, allowing us to quantitatively describe the evolution of incarceration in the U.S. We then estimate the incarceration penalty – the difference in labor market outcomes such as occupation, earnings, employment, and labor force participation between incarcerated and non-incarcerated men – across this full time period. Previous incarceration is associated with a 6-14% over the period, with the penalty increasing over time as incarceration rates increased. Using samples linked back to their childhood Census and a linked sample of brothers, we show the penalty remains even after controlling for observed and unobserved measures of family background. A pseudo-event study around the year of prison admission for state prisoners linked to Census shows that labor market trajectories prior to incarceration also cannot explain the penalty. We provide evidence that longer incarceration spells and increased chances of recidivism exacerbate the penalty.