BOHANON & CUROTT: High incarceration rates are drag on economy

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Economic Analysis by Cecil Bohanon & Nick CurottIn these divisive times, when there is little consensus on much of anything that touches politics, a surprising number of political players agree on one thing: America keeps too many people in prisons and jails. Political progressives and classical liberals are naturally inclined to be suspicious of America’s high incarceration rate, but even hard-boiled conservatives like former U.S. House Speaker Newt Gingrich find the facts disturbing.

First some data. The incarceration rate in the United States is 698 per 100,000 population. Indiana is above the national average, at 732. Among developed nations, the next closest is the United Kingdom, at 139, with Iceland coming in lowest, at 39. Approximately 2.3 million people are incarcerated in our country, a number nearly three times the population of Indianapolis. Indiana has 45,000 people in its jails and prisons, a number about equal to the population of Kokomo.

Of course, a partial explanation for the phenomenon is that the United States has more violent crime. The incidence of violent crime in our country is 372 per 100,000 people. Compare this to a rate of 183 per 100,000 in Germany or to a low of 27 per 100,000 in Japan. However, the United States outpaces the rest of the developed world in incarceration more than it does in violent crime.

Second, some basic observations. There are at least two reasons to incarcerate: Some offenders are truly dangerous, and their incarceration is necessary to protect society. In addition, the prospect of going to prison presumably deters non-offenders from engaging in crime.

Everyone agrees on the first point; experts differ as to the efficacy of the second. But there are also costs associated with keeping people in jail: $20,000 to $40,000 per prisoner per year. Economists also note society loses what a prisoner could be producing if he or she were employed on the outside. And that doesn’t account for the disruptions inflicted upon the families of those incarcerated.

Finally, there appear to be some reforms that are “low-hanging fruit.” For example, more than 250,000 people in U.S. prisons are more than 50 years old. Data indicates that the recidivism rate for over-50 prisoners is around 7 percent compared to 43 percent for the overall prison population.

If we could figure a way to release 100,000 prisoners over the age of 50, the cost savings to taxpayers would be in the billions. Independent of one’s philosophical or political perspective, finding cost-efficient alternatives to incarceration makes sense. And maybe sense can prevail.•


Bohanon and Curott are professors of economics at Ball State University. Send comments to

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