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

Educational Attainment and Spending on the Corrections System 67
Figure 5.2
2002 Value of Lifetime Decrease in Incarceration Spending Resulting from Increased
Education for U.S.-Born Women
15,000
Lifetime decrease in spending (2002 $)
10,000
5,000
Bachelor’s degree
Some college
High school graduate
NOTES: The figure shows the value of decreases in spending relative to that for high school
dropout. Dollar amounts are expressed in 2002 dollars discounted to age 18 using a 3 percent
real discount rate.
RAND MG686-5.2
0
White Asian Black Hispanic
on only the direct relationship between education and incarceration, constitute a conservative
estimate of the social savings through reduced incarceration.
Sensitivity Analysis
We assume that the difference in the probabilities of incarceration between people
in a given demographic group at a given age at one level of education and people in
that demographic group at that age at a higher level of education reflects the effects
of increased educational attainment. We estimate the effects of increased educational
attainment on the costs of incarceration as the product of this difference for each
demographic group at each age times the average cost of incarceration. Accordingly,
changing the estimated effect of increases in educational attainment by 25 percent
reduces the resulting estimate by exactly that percentage. A 25 percent reduction in the
estimated effect of increases in education on the cost of incarceration yields a 25 percent
reduction in the estimate of the reduction in incarceration costs that result from
such increases.