Incarceration and Household Wealth

A large literature documents the deleterious economic consequences of incarceration. But little is known about the consequences of incarceration for household wealth, an indicator of economic wellbeing that may be especially important to the survival of low-income families for whom incarceration is common. In this article, we use individual-level data (from the Fragile Families and Child Wellbeing Study) and state-level panel data (from 1985 to 2005) to examine how incarceration is associated with asset accumulation and asset loss among formerly incarcerated men, their romantic partners, and their communities. Results from the individual-level data, which pay careful attention to the social forces that select individuals into incarceration, document that incarceration is negatively associated with vehicle and bank account ownership among men and that these associations are concentrated among men who previously held such assets. In addition, the economic consequences of incarceration spill over to the romantic partners of these men, especially those living with men prior to their incarceration, who report a lower likelihood of home and vehicle ownership. Results from the state-level data document that incarceration rates diminish homeownership rates among Blacks and, in doing so, widen Black-white inequalities in homeownership. Taken together, the results show that the considerable collateral consequences of incarceration may increase inequality in household wealth.