Economic Burden of Incarceration


The Economic Burden of Incarceration in the United States

Report finds economic costs of incarceration top $1 trillion in the United States annually

In July 2016, the Concordance Institute for Advancing Social Justice at the George Warren Brown School of Social Work at Washington University in St. Louis, published a report titled The Economic Burden of Incarceration in the U.S., which found that the annual economic burden of incarceration in the United States top $1 trillion annually.

As the Report notes, the cost of incarceration is often cited as $80 billion spent on corrections, which is truly just the tip of the iceberg. The Report notes that over the past 40 years the US prison population has grown sevenfold, making the United States the world leader in incarceration. The Report states that the true cost of incarceration far exceeds the amount spent on corrections alone because that number ignores numerous other costs falling on incarcerated persons, their families, children, and communities. The report states that these additional costs must be considered when creating public policy because they reduce the overall welfare of society.  The Report found that the aggregate burden of incarceration approached $1 trillion annually, or approximately 6% of GDP, a number 11 times larger than the cost of corrections spending alone.

One of the things that makes this study unique, and something we at Drug War Stories have been eager to see for a long time, is that it considers research regarding the value of a person’s life and time. As an attorney who had practiced civil litigation, I have often thought that some of the principles of damage calculation in that arena could and should be applied to calculating the true costs of the war on drugs. Indeed, the study relied in part on jury awards in determining the value of life and time.

The study focused on 22 separate costs grouped into three categories: 1. Costs of corrections, 2. Costs borne by incarcerated persons, and 3. Costs borne by families children and communities.

Cost of Corrections:

The Report estimates the total cost of corrections at approximately $91 billion annually, which includes not only the cost associated with operating prisons and jails, but also includes costs such as pension obligations, healthcare benefits for correctional staff, and health care provided to inmates.

Costs borne by incarcerated persons:

The Report examines five costs in this category including:

  • lost wages of incarcerated persons while they’re incarcerated;
  • reduced lifetime earnings of formerly incarcerated persons;
  • the cost of nonfatal injuries sustained while incarcerated;
  • the cost of fatal injuries sustained while incarcerated; and
  • the higher mortality rates associated with formerly incarcerated persons.

Together, these costs total 392.8 billion dollars.

Costs borne by families, children, and communities:

The remaining 16 costs detailed in the Report focus on costs to families, children, and communities resulting from incarceration. These costs include:

  • visitation costs for family visiting the incarcerated;
  • moving costs for family members moving closer to the incarcerated;
  • eviction costs resulting from eviction (either due to the decrease in family income, or post-conviction as convicted persons often are prohibited from public housing or by private landlords);
  • interest on criminal justice debt;
  • adverse health effects (with the report noting that 66% of incarcerated persons and family members experience mental health effects such as depression anxiety PTSD);
  • infant mortality;
  • children’s education level and later wages as an adult;
  • increased criminality of children of incarcerated parents;
  • child welfare costs;
  • child homelessness resulting from parental incarceration;
  • homelessness of formerly incarcerated persons;
  • reentry programs;
  • decreased property values;
  • criminogenic nature of prison (with the report noting that high levels of incarceration actually increase crime by reinforcing certain behaviors and/or as a result of moving large numbers of people from particular communities);
  • divorce; and
  • costs of reduced marriage

Together, these costs total 512.7 billion dollars according to the Report.

The authors of this report are to be commended for their work and demonstrating that the true costs to both the incarcerated and society at large are many times more than the costs of corrections alone.  This was a laudable and praiseworthy first step. However, as the report itself makes clear, the estimates in the study may well underestimate the true costs of incarceration for a number of reasons. The report notes that the study does not account for the harm incarceration causes to social networks or the emotional harm suffered by children and families; it does not include the cost of juvenile incarceration; and it does not account for costs such as psychological pain suffered by children who become homeless or the deterioration in physical health experienced by incarcerated persons and members of their families. Finally it doesn’t account for the human potential and innovation lost by incarcerating millions upon millions of people.  Of all the costs of incarceration, the ones that have yet to be accounted for  may well be the most significant.

The Report states that it does not consider the benefits of incarceration, which presumably would offset the costs detailed study. Indeed there may well be benefits to society of incarcerating violent felons including murderers, rapists, armed robbers and the like. It is Drug War Stories’ position, however, that there is no societal benefit to incarcerating nonviolent drug offenders, which would be much more appropriately handled as a medical issue and not a criminal issue. Indeed, one of the problems of this study from our perspective is that it does not distinguish between the various reasons for incarceration. Clearly there is much more work to be done, including examining the costs of incarceration for drug war prisoners separately from prisoners as a whole. That said, this is a most welcome first step and one which we hope is followed by many more studies to inform our public policy decisions on the drug war and drug policy.


The Economic Burden of Incarceration in the U.S. (pdf)