Megan T. Stevenson Publications

Using newly-linked administrative and commercial data from Virginia spanning 25 years, we study the consequences of incarceration. While previous research has examined labor market outcomes and recidivism, we focus on two of the primary channels through which low-income households build wealth: asset ownership (homes and cars) and human capital formation. To identify causal effects, we use a matched differencein-differences design. In line with much of the literature on the impact of incarceration in the U.S., we find no evidence of scarring effects on labor market outcomes or changes in recidivism beyond the incapacitation period. However, we find that incarceration leads to a persistent reduction in asset accumulation: seven years after sentencing, homeownership has declined by 1.1 percentage points (12.1%) and car ownership by 2.7 percentage points (18.1%). Incarceration also lowers human capital formation, reducing college enrollment by 1.4 percentage points (15.1%).

Noncarceral conviction is a common outcome of criminal court cases: for every individual incarcerated, there are approximately three who were recently convicted but not sentenced to prison or jail. We extend the binary-treatment judge IV framework to settings with multiple treatments and use it to study the consequences of noncarceral conviction. We outline assumptions under which widely-used 2SLS regressions recover margin-specific treatment effects, relate these assumptions to models of judge decision-making, and derive an expression that provides intuition about the direction and magnitude of asymptotic bias when a key assumption on judge decision-making is not met. We find that noncarceral conviction (relative to dismissal) leads to a large and long-lasting increase in recidivism for felony defendants in Virginia. In contrast, incarceration (relative to noncarceral conviction) leads to a short-run reduction in recidivism, consistent with incapacitation. Our empirical results suggest that noncarceral felony conviction is an important and overlooked driver of recidivism.