Custodial Versus Non-Custodial Sentences: Long-Run Evidence from an Anticipated Reform

Abstract: In contexts where incarceration conditions are particularly favorable, how does a custodial sentence impact the life of individuals in terms of later crime and labor market outcomes compared to a non-custodial one? We answer this question by taking advantage of a Danish reform whereby most offenders tried for a drunk-driving crime were placed on probation rather than sentenced to incarceration. Our first key finding is that stakeholders anticipated the consequences of the reform: around the time of the reform, the number of cases tried dropped and the nature of the cases changed significantly. To measure the relative impact of incarceration, we therefore resort to a novel instrumental variable approach exploiting quasi-exogenous variation in the probability of being tried after the reform, and therefore incarcerated, based on the crime date. We find that incarcerated offenders later commit more crimes and have weaker ties to the labor market than those placed on probation. Our results suggest that the criminogenic effect of incarceration is driven by its negative impact on offenders' labor market attachment, which itself appears to be particularly affected by the stigma attached to having a criminal record.

This will be a hybrid event taking place both on location in Amsterdam and online.