A Wealth of Inequalities: Mass Incarceration, Employment, and Racial Disparities in U.S. Household Wealth, 1996 to 2011

Abstract

Despite the strong relationship between the rise in mass incarceration over the last forty years and racial inequality in employment and wages, few studies have examined the long-term consequences and spillover effects of criminal justice contact on the black-white wealth gap in the United States. In this paper, we investigate the mechanisms whereby the local and distal incarceration of a family member affects household wealth, focusing on wealth disparities by race and education. Using data from the Survey of Income and Program Participation (SIPP), the Current Population Survey, and the Survey of Inmates in State and Federal Correctional Facilities and Local Jails, we apply fixed-effects and probit models to estimate how a family member’s incarceration influences household assets and debt over panel waves. We find that having an incarcerated family member reduced household assets by 64.3 percent and debt by 85.1 percent after we adjusted for the underrepresentation of institutionalization in SIPP data. We also discuss these findings in the context of broader racial disparities in wealth and employment. Our findings demonstrate how contemporary patterns of mass incarceration contribute to the maintenance of social inequality in wealth and form barriers to economic security for other household members.