The economic effects of prison closures on local communities

Abstract

This study examines the economic impacts of prison closures on local communities in the United States during the early 2010s. Using a difference-in-differences design, my analyses reveal a significant reduction in public-sector employment and a greater impact on low-skilled workers. However, I find little evidence of an adverse spillover effect on private-sector employment. Consequently, the overall implications of prison closures on the broader labor and housing markets are modest.