The Economic Case for Sentencing Reform

By and ·May 19, 2017
University of Texas, Austin

The Issue:

On May 10, Attorney General Jeff Sessions issued a directive instructing federal prosecutors to "charge and pursue the most serious, readily provable offense" in all but exceptional cases. The action constitutes a reversal of the 2013 directive issued by former Attorney General Eric Holder who had instructed prosecutors to refrain from charging low-level, non-violent offenders "with offenses that impose draconian mandatory minimum sentences." The new directive will serve to increase the prevalence of mandatory minimum sentences in the case of drug crimes. A bipartisan group of senators responded to Sessions' directive by introducing a bill that would give federal judges more discretion to impose lower sentences, and similar bipartisan legislation was expected to be introduced in the House.

More rigorous application of sentencing guidelines will subject a larger share of defendants to longer periods of incarceration, and increase the total incarcerated population in the U.S.

The Facts:

  • The United States has the largest incarcerated population in the world. With approximately 2.2 million individuals serving sentences in jails and prisons, the U.S. incarcerates more than 20 percent of the world’s prisoners. The U.S. also has a higher incarceration rate than any other large country – those with populations over 200,000 – with a rate that is over 4 times the world average (see chart).
  • The prison population has surged in the United States over recent decades, with U.S. incarceration rates increasing by more than 220 percent between 1980 and 2014. In 2014, individuals convicted of non-violent drug offenses comprised 50 percent of the Federal prison population and 16 percent of state prison populations, according to Bureau of Justice Statistics. Demographically, the U.S. incarcerated population is disproportionately concentrated among minority and low-income individuals; Blacks and Hispanics represent over 50 percent of the incarcerated population and historically, a large share have low levels of education: nearly two-thirds of the prison population had not completed high school, according to a 2003 report.
  • Mandatory minimum sentences are prescribed punishments that apply to particular criminal offenses. Because over 90 percent of criminal convictions are obtained through guilty pleas rather than through criminal trials, prosecutors frequently use mandatory minimum sentences as a bargaining tool in the plea process. When prosecutors and judges rigorously apply mandatory minimum sentences, plea bargains may be easier to obtain and resulting sentences are likely to be longer, increasing the total incarcerated population.
  • Research has found that the crime-reducing benefits of incarceration are small and that these benefits decline as the incarcerated population grows. Intuitively, the average level of criminal risk among prisoners decreases when the prison population expands, and the value of incapacitating a low-risk offender may be less than the cost of detention. Because the U.S. already has the highest incarcerated population in the world, the costs of further increasing the size of the incarcerated population likely exceed any additional benefits (see this study for an overview). While estimates vary, reviews of economic research on incarceration in the U.S. find that a 10 percent increase in the incarcerated population decreases crime by 2 percent or less.
  • Do longer sentences reduce crime? Increasing the length of time that prisoners serve could help reduce crime if the threat of harsher punishment acts as a deterrent to potential offenders or if keeping people in jail prevents them from committing criminal offenses in the outside world. On the other hand, longer sentences may increase future re-offending through multiple channels, including by causing social or emotional harm, by allowing offenders to build criminal expertise, or by causing labor market skills to atrophy while an individual is incarcerated. At the same time, because criminal risk declines with age, incapacitating older individuals using long sentences likely yields small benefits. The empirical evidence offers some estimates of these effects. Longer sentences are unlikely to deter prospective youth offenders; researchers find that a 10 percent increase in sentence length leads to a zero to 0.5 percent decrease in youth arrest rates. Some studies have found evidence that longer sentences modestly reduce re-offending rates after release, though this research also finds that the reduction in offending does not always outweigh the cost of detention (examples include work on three-strikes laws, sentence enhancements, parole release, and reforms to reduce prison over-crowding). However, a growing body of work finds evidence that longer sentences actually cause an increase in re-offending; new work that looks at offending outcomes of individuals accused of similar offenses but assigned to judges with different sentencing histories finds that each additional sentence year leads to a 4 to 7 percentage point increase in recidivism after release.
  • The costs of incarceration extend beyond direct costs to the government. In 2012, total U.S. spending on incarceration totaled over $80 billion, or more than $250 per capita. Survey data suggests that the average yearly cost of confining an adult prisoner ranges from $14,000 to $60,000. In addition to direct government spending on corrections, incarceration has large indirect costs for incarcerated individuals. Job applicants with criminal records are 50 percent less likely to receive an interview request or job offer compared to identical applicants without criminal records, according to one study. Labor market restrictions for individuals with records decrease the earnings of individuals that have been incarcerated; research has found that the formerly incarcerated earn 10 to 40 percent less than similar workers without a history of incarceration. In terms of sentence length, recent research finds that a one year increase in incarceration decreases employment by 4 percentage points and reduces earnings by approximately 30 percent after release. While a father is incarcerated, the probability that a family is below the poverty level increases by nearly 40 percent. In addition, having a criminal record can decrease access to housing and government assistance, and serving time in prison can have negative consequences for health.
  • Researchers have found that increasing the number of police or even indirect policies improving education and labor market opportunities for at-risk populations may have higher returns for community safety. Researchers have found that direct investments in expanding law enforcement decrease crime rates, with a 10 percent increase in police force size reducing crime rates by 3 percent to more than 10 percent. Policies that improve employment opportunities for at-risk populations also have the potential to reduce criminal behavior. Studies have found that increased educational attainment lowers juvenile crime, with a 10 percent increase in high school graduation rates decreasing arrest rates by 9 percent. Similarly, increases in school quality and participation in pre-school programs have been shown to decrease juvenile arrest rates. Evaluations of in-school cognitive behavioral therapy for adolescent boys find that such programs can significantly decrease criminal behavior among at risk youth. Policies that improve labor market conditions are also likely to reduce crime; research has found that a 10 percent increase in wages for non-college educated men leads to a 10 to 20 percent reduction in crime rates.

What this Means:

As U.S. incarceration rates have grown in recent decades, policy-makers, researchers, and advocates have become increasingly concerned about the equity and effectiveness of current incarceration policies. A growing body of economic research supports the bipartisan case for sentencing reform, through both reducing mandatory minimum sentences and increasing judicial discretion in sentencing. The current Department of Justice recently instructed federal prosecutors to “charge and pursue the most serious and readily provable offense” in all but exceptional cases. This policy reverses course from prior guidance that encourages the use of judiciary discretion in applying mandatory minimum sentences for low-level non-violent drug offenders. More rigorous application of sentencing guidelines will subject a larger share of defendants to longer periods of incarceration, and increase the total incarcerated population in the U.S. This policy is unlikely to be cost-effective and will provide limited public safety benefits while increasing the costs borne by the least advantaged groups of our society.


Crime / Crime and Criminal Justice
Written by The EconoFact Network. To contact with any questions or comments, please email [email protected].
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