Economics of Incarceration

9 Pages Posted: 2 Dec 2016

Date Written: December 2016


Incarceration rates have more than doubled in Australia over the past several decades, with a dramatic increase since 2010. There are many mechanisms by which these changes in imprisonment exert a causal influence on individual behaviour. The threat of incarceration can deter an individual from committing a crime. The experience of incarceration incapacitates a criminal but can also expose a prisoner to more criminal peers and reduce future legal employment opportunities. This article provides students an introduction to a rapidly expanding economics literature that empirically tests the mechanisms of incarceration and estimates its costs and benefits.

Suggested Citation

Schnepel, Kevin, Economics of Incarceration (December 2016). Australian Economic Review, Vol. 49, Issue 4, pp. 515-523, 2016. Available at SSRN: or

Kevin Schnepel (Contact Author)

The University of Sydney ( email )

University of Sydney
Sydney, NC NSW 2006

IZA ( email )

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