The Effect of Prison Population Size on Crime Rates: Evidence from Prison Overcrowding Litigation

Abstract

Previous studies of the impact of changes in prison populations on crime rates have failed to control adequately for the simultaneity between those two variables. While increases in the number of prisoners are likely to reduce crime rising crime rates also translate into larger prison populations. To break that simultaneity this paper uses the status of prison overcrowding litigation in a state as an instrument for changes in the prison population. Overcrowding litigation is shown to have a negative impact on prison populations but is unlikely to be related to fluctuations in the crime rate except through its effect on prison populations. This methodology results in estimates of the elasticity of crime with respect to the numbers of prisoners that are two to three times greater than those of previous studies. The results are robust across all of the crime categories I examine. For each prisoner reduction induced by overcrowding litigation the total number of crimes committed increases by approximately 15 per year. The social benefit from eliminating those 15 crimes is approximately $45000; the annual per-prisoner costs of incarceration are roughly $30000.

JEL Classification: K42, H72, D61