Drug Policy and Intergenerational Income Mobility in the United States

19 Pages Posted: 18 Jan 2016

See all articles by Owen Thompson

Owen Thompson

Williams College - Department of Economics

Date Written: January 2016

Abstract

A conviction for drug possession blocks some of the most common pathways through which individuals from low income families achieve upward economic mobility in the United States, such as access to higher education, entry‐level employment, and military service. These considerations are of growing importance because the number of drug‐related arrests have nearly quadrupled since 1980. This article estimates the effect of a conviction for drug possession on earnings mobility using a sample of individuals born between 1980 and 1984, some of the first cohorts to come of age in the context of intensive U.S. drug criminalization and enforcement. To distinguish the effect of a drug conviction from the effect of drug use or general criminality, I compare mobility among individuals with drug convictions to control groups who self‐report significant drug use and who have had interactions with the criminal justice system that did not lead to a drug conviction. I find that relative to these groups, a drug conviction reduces the probability of transitioning upward from various points in the lower half of the income distribution by 10–15 percentage points, or as much as 50%, and that these effects are substantially stronger for non‐whites than for whites. These findings suggest that a policy of decriminalizing nonviolent drug possession would substantially increase intergenerational mobility among low income populations, and this effect should be weighed alongside more conventional costs and benefits in formulating optimal drug policy.

JEL Classification: J38, J15, K42

Suggested Citation

Thompson, Owen, Drug Policy and Intergenerational Income Mobility in the United States (January 2016). Contemporary Economic Policy, Vol. 34, Issue 1, pp. 127-145, 2016. Available at SSRN: https://ssrn.com/abstract=2716472 or http://dx.doi.org/10.1111/coep.12109

Owen Thompson (Contact Author)

Williams College - Department of Economics ( email )

Fernald House
Williamstown, MA 01267
United States

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