The Effect of Prison Population Size on Crime Rates: Evidence from Cocaine and Marijuana Mandatory Minimum Sentencing

Abstract

Simultaneity between prison populations and crime rates makes it difficult to isolate the causal effect of changes in prison populations on crime. This paper uses marijuana and cocaine mandatory minimum sentencing to break that simultaneity. Using panel data for 50 states over 40 years, this paper finds that the marginal addition of a prisoner results in a higher, not lower crime rate. Specifically, a 1 percent increase in the prison population results in a 0.28 percent increase in the violent crime rate and a 0.17 percent increase in the property crime rate. This counter-intuitive result suggests that incarceration, already high in the U.S, may have now begun to achieve negative returns in reducing crime. As such it supports the work of a number of scholars who have suggested that incarceration may have begun to have a positive effect on crime because of a host of factors.