White House Counsel on Economic Advisors releases big report providing "Economic Perspectives on Incarceration and the Criminal Justice System"

As highlighted in this prior post, Jason Furman, chairman of the White House Council of Economic Advisers, co-authored a New York Times commentary this past week headlined "Why Mass Incarceration Doesn’t Pay." Today, the full Council of Economic Advisers released this big new report titled "Economic Perspectives on Incarceration and the Criminal Justice System." Here is part of the lengthy report's lengthy executive summary:

Calls for criminal justice reform have been mounting in recent years, in large part due to the extraordinarily high levels of incarceration in the United States. Today, the incarcerated population is 4.5 times larger than in 1980, with approximately 2.2 million people in the United States behind bars, including individuals in Federal and State prisons as well as local jails. The push for reform comes from many angles, from the high financial cost of maintaining current levels of incarceration to the humanitarian consequences of detaining more individuals than any other country.

Economic analysis is a useful lens for understanding the costs, benefits, and consequences of incarceration and other criminal justice policies. In this report, we first examine historical growth in criminal justice enforcement and incarceration along with its causes. We then develop a general framework for evaluating criminal justice policy, weighing its crime-reducing benefits against its direct government costs and indirect costs for individuals, families, and communities. Finally, we describe the Administration’s holistic approach to criminal justice reform through policies that impact the community, the cell block, and the courtroom....

Criminal justice policies have the capacity to reduce crime, but the aggregate crime-reducing benefits of incarceration are small and decline as the incarcerated population grows.

• Given that the U.S. has the largest prison population in the world, research shows that further increasing the incarcerated population is not likely to materially reduce crime.
• Economic research suggests that longer sentence lengths have little deterrent impact on offenders. A recent paper estimates that a 10 percent increase in average sentence length corresponds to a zero to 0.5 percent decrease in arrest rates.
• Emerging research finds that longer spells of incarceration increase recidivism. A recent study finds that each additional sanction year causes an average increase in future offending of 4 to 7 percentage points.

Investments in police and policies that improve labor market opportunity and educational attainment are likely to have greater crime-reducing benefits than additional incarceration.

• Expanding resources for police has consistently been shown to reduce crime; estimates from economic research suggest that a 10 percent increase in police force size decreases crime by 3 to 10 percent. At the same time, more research is needed to identify and replicate model policing tactics that are marked by trust, transparency, and collaborations between law enforcement and community stakeholders.
• Labor market conditions and increased educational attainment can have large impacts on crime reduction by providing meaningful alternatives to criminal activity. Estimates from research suggest that a 10 percent increase in the high school graduation rate leads to a 9 percent drop in arrest rates, and a 10 percent increase in wages for non-college educated men leads to a 10 to 20 percent reduction in crime rates....

Given the total costs, some criminal justice policies, including increased incarceration, fail a cost-benefit test.

• Economic researchers have evaluated the costs and benefits of policies in different criminal justice areas and find that relative to investments in police and education, investments in incarceration are unlikely to be cost-effective.
• Moreover, cost-benefit evaluations of incarceration and sentencing often fail to consider collateral consequences, which would render these policies even more costly.
• CEA conducted “back-of-the-envelope” cost-benefit tests of three policies: increasing incarceration, investing in police, and raising the minimum wage.
  • We find that a $10 billion dollar increase in incarceration spending would reduce crime by 1 to 4 percent (or 55,000 to 340,000 crimes) and have a net societal benefit of -$8 billion to $1 billion dollars.
  • At the same time, a $10 billion dollar investment in police hiring would decrease crime by 5 to 16 percent (440,000 to 1.5 million crimes) have a net societal benefit of $4 to $38 billion dollars.
  • Drawing on literature that finds that higher wages for low-income individuals reduce crime by providing viable and sustainable employment, CEA finds that raising the minimum wage to $12 by 2020 would result in a 3 to 5 percent crime decrease (250,000 to 510,000 crimes) and a societal benefit of $8 to $17 billion dollars.