The economic effects of prison closures on local communities

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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.

Original languageEnglish
Article number111155
Number of pages5
JournalEconomics Letters
Publication statusPublished - Jul 2023


  • Local demand shock
  • Local economy
  • Prison
  • Public-sector employment
  • Spillover impact

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