W w w. H a m I l t o n p r o j e c t. O r g acknowledgements

12   Ten Economic Facts about Crime and Incarceration in the United States

CHAPTER 3:

 The Economic and Social Costs  

of  Crime and Incarceration

Today’s high rate of incarceration is considerably costly to American taxpayers, with state governments 

bearing the bulk of the fiscal burden. In addition to these budgetary costs, current incarceration 

policy generates economic and social costs for both those imprisoned and their families.

8.  Per capita expenditures on corrections more than tripled over the 

past thirty years.

9.  By their fourteenth birthday, African American children whose 

fathers do not have a high school diploma are more likely than not to 

see their fathers incarcerated.

10.  Juvenile incarceration can have lasting impacts on a young person’s 

future.

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The Hamilton Project  •  Brookings   13

corrections spending per capita (Census Bureau 2001, 2013; Raphael 

and Stoll 2013). Per capita expenditures on corrections (denoted by 

the dashed line in figure 8) more than tripled between 1980 and 

2010. In real terms, each U.S. resident on average contributed $260 

to corrections expenditures in 2010, which stands in stark contrast 

to the $77 each resident contributed in 1980.

Crime-related expenditures generate a significant strain on state 

and federal budgets, leading some to question whether public funds 

are best spent incarcerating nonviolent criminals. Preliminary 

evidence from the recent policy experience in California—in 

which a substantial number of nonviolent criminals were released 

from state and federal prisons—suggests that alternatives to 

incarceration for nonviolent offenders (e.g., electronic monitoring 

and house arrest) can lead to slightly higher rates of property 

crime, but have no statistically significant impact on violent crime 

(Lofstrom and Raphael 2013). These conclusions have led some 

experts to suggest that public safety priorities could better be 

achieved by incarcerating fewer nonviolent criminals, combined 

with spending more on education and policing (ibid.).

Per capita expenditures on corrections more 

than tripled over the past thirty years.

8.

In 2010, the United States spent more than $80 billion on 

corrections expenditures at the federal, state, and local levels. 

Corrections expenditures fund the supervision, confinement, 

and rehabilitation of adults and juveniles convicted of offenses 

against the law, and the confinement of persons awaiting trial 

and adjudication (Kyckelhahn 2013). As figure 8 illustrates, total 

corrections expenditures more than quadrupled over the past 

twenty years in real terms, from approximately $17 billion in 1980 

to more than $80 billion in 2010. When including expenditures for 

police protection and judicial and legal services, the direct costs of 

crime rise to $261 billion (Kyckelhahn and Martin 2013).

Most corrections expenditures have historically occurred at the state 

level and continue to do so. As shown in figure 8, in 2010, more than 

57 percent of direct cash outlays for corrections came from state 

governments, compared to 10 percent from the federal government 

and nearly 33 percent from local governments. Increased 

expenditures at every level of government are not surprising given 

the growth in incarceration, which has far outstripped population 

growth, leading to a higher rate of incarceration and higher 

Chapter 3: The Economic and Social Costs of Crime and Incarceration

FIGURE 8.

Total Corrections Expenditures by Level of Government and Per Capita Expenditures, 

1980–2010

In real terms, total corrections expenditures today are more than 350 percent higher than they were in 1980, while per capita 

expenditures increased nearly 250 percent over the same period.

Sources: Bauer 2003a, 2003b; Census Bureau 2001, 2011, 2013; Gifford 2001; Hughes 2006, 2007; Hughes and Perry 2005; Perry 2005, 2008; Kyckelhahn 

2012a, 2012b, 2012c; Kyckelhahn and Martin 2013; authors’ calculations.

Note: The dollar figures are adjusted to 2010 dollars using the CPI-U-RS (Consumer Price Index Research Series Using Current Methods). Population estimates for 

each year are taken from the Census Bureau’s estimates for July 1 of that year. The figure includes only direct expenditures so as not to double count the value of 

intergovernmental grants. For more details, see the technical appendix.

Total e

xpenditur

es

(in millions of 2010 dollars)

Per capita e

xpenditur

es

(in 2010 dollars)

0

0

20,000

40,000

60,000

80,000

10,000

30,000

50,000

70,000

90,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Federal

State

Local

Per capita expenditures

50

100

150

200

250

300

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14   Ten Economic Facts about Crime and Incarceration in the United States

than are mothers. These risks of imprisonment are magnified when 

parental educational attainment is taken into account; high school 

dropouts are much more likely to be imprisoned than are individuals 

with higher levels of education. Fathers who are high school dropouts 

face a cumulative risk of imprisonment that is approximately four 

times higher than that of fathers with some college education. An 

African American child with a father who dropped out of high school 

has more than a 50 percent chance of seeing that father incarcerated 

by the time the child reaches age fourteen.

Young children (ages two to six) and school-aged children of 

incarcerated parents have been shown to have emotional problems and 

to demonstrate weak academic performance and behavioral problems, 

respectively. It is unclear, however, the extent to which these problems 

result from having an incarcerated parent as opposed to stemming 

from the other risk factors faced by families of incarcerated individuals; 

incarcerated parents tend to have low levels of education and high rates 

of poverty, in addition to frequently having issues with drugs, alcohol, 

and mental illness  (Center for Research on Child Wellbeing 2008).

In 2010, approximately 2.7 million children, or over 3 percent of 

all children in the United States, had a parent in prison (The Pew 

Charitable Trusts 2010). As of 2007, an estimated 53 percent of prisoners 

in the United States were parents of children under age eighteen, a 

majority being fathers (Glaze and Maruschak 2010).  Furthermore, it 

is not the case that these parents were already disengaged from their 

children’s lives. For example, in 2007, approximately half of parents 

in state prisons were the primary provider of financial support for 

their children—and nearly half had lived with their children—prior 

to incarceration (ibid.). Furthermore, fathers often are required to pay 

child support during their incarceration, and since they make little 

to no money during their incarceration, they often accumulate child 

support debt. 

Figure 9 illustrates the cumulative risk of imprisonment for parents—

or the projected lifetime likelihood of serving time for a person 

born in a specific year—by the time their child turns fourteen, by 

child’s race and their own educational attainment (Wildeman 2009). 

Regardless of race, fathers are much more likely to be imprisoned 

FIGURE 9.

Cumulative Risk of Parent’s Imprisonment for Children by Age 14, by Race and Parent’s 

Education

An African American child whose father did not complete high school has a 50 percent chance of seeing his or her father incarcerated by 

the time the child reaches his or her fourteenth birthday.

Source: Wildeman 2009.

Note: Cumulative risk of imprisonment is the projected lifetime likelihood of a parent’s imprisonment by the time his or her child turns fourteen. 

Children included in the analysis were born in 1990. For more details, see the technical appendix.

By their fourteenth birthday, African American 

children whose fathers do not have a high 

school diploma are more likely than not to see 

their fathers incarcerated.

9.

Chapter 3: The Economic and Social Costs of Crime and Incarceration

Cumula

tiv

e risk of par

en

t’s

imprisonmen

t (per

cen

t)

High school dropout

High school only

Some college

0

10

20

30

40

50

60

Father

Mother

White children

African American children

Parental education

Father

Mother

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