The Benefits to Taxpayers from Increases in Students - RAND ...

Educational Attainment and Spending on the Corrections System 63
insight into the nature of this social benefit and potentially providing guidance to more
targeted policies.
We use the Sourcebook of Criminal Justice Statistics, 2003 (Pastore and Maguire,
2003) to compute the per-inmate costs of incarceration. Accordingly, operating the
state prison system costs roughly $30,000 per prisoner per year (Table 5.2). Similarly,
the local jail system requires expenditures on the order of $27,000 per year per inmate.
We assume that savings from education occur because an individual with more education
is less likely to be incarcerated. In other words, cost per inmate is assumed to be
independent of an inmate’s education level.
For state prisons, we use the 1997 administration of the Survey of Inmates in
State and Federal Correctional Facilities to estimate the incarcerated population for
each education-age-race/ethnicity-gender combination. We also use the 1997 Current
Population Survey to estimate general population counts in each corresponding subgroup.
Because the Current Population Survey does not include incarcerated persons,
we calculate the probability of incarceration as the number of prisoners in each population
category divided by the sum of the general population and the number of prisoners
for that category.
We follow the same procedure for county and municipal jails, using the 2002
Survey of Inmates of Local Jails and, correspondingly, the 2002 Current Population
Survey.
The Effect of Educational Attainment on Crime Rates
Research on the interplay between education and crime dates back at least three decades
(Ehrlich, 1975), although a demonstration of a causal effect of education on criminal
activity is rather recent (for instance, Lochner and Moretti, 2004). Scholars have long
conceptualized why and how education would affect crime and have analyzed nationally
representative data to find evidence of the relationship. Freeman (1996) noted that,
as of 1993, over two-thirds of incarcerated men lacked a high school diploma. Pettit
and Western (2004) concluded that incarceration risks are “highly stratified by education.”
Not surprisingly, prison inmates average less than 12 years of schooling. Analyses
of administrative data on arrests and survey data using reports from the inmates themselves
commonly indicate large differences in crime rates among groups of people with
different levels of education.
Basically, education reduces the chance that an individual will engage in criminal
activity, since education adds to the individual’s human capital. The desirable effects of
increased human capital occur in a number of different yet complementary and interacting
channels.
First, a person with more education is less likely to be unemployed. An individual
with a legitimate job has less incentive to engage in crime, everything else constant.