The intergenerational effects of parental incarceration. IFAU Working paper 2019:24

We estimate the causal effects of parental incarceration on children’s shortand long-run out-comes using administrative data from Sweden. Our empirical strategy exploits exogenous varia-tion in parental incarceration from the random assignment of criminal defendants to judges with different incarceration tendencies. We find that the incarceration of a parent in childhood leads to a significant increase in teen crime and significant decreases in educational attainment and adult employment. The effects are concentrated among children from the most disadvantaged families, where criminal convictions increase by 10 percentage points, high school graduation decreases by 25 percentage points, and employment at age 25 decreases by 29 percentage points. In contrast, there are no detectable effects among children from more advantaged families. These results suggest that the incarceration of parents with young children may significantly increase the intergenerational persistence of poverty and criminal behavior, even in affluent countries with extensive social safety nets. aWe thank Manudeep Bhuller, Barbara Biasi, Anders Björklund, Stephen Billings, Leah Platt Boustan, Hank Farber, Randi Hjalmarsson, Per Johansson, Alan Krueger, Ilyana Kuziemko, Matthew Lindquist, Alex Mas, Michael Mueller-Smith, Joseph Murray, David Price, Torsten Santavirta, Andrei Shleifer, Jeff Weaver, Christopher Wildeman, Crystal Yang, Owen Zidar, and numerous seminar participants for helpful comments and suggestions. Kevin DeLuca, Nicole Gandre, Disa Hynsjo, Ashley Litwin, Alexia Olaizola, James Reeves, Amy Wickett, and numerous students in Sweden provided excellent research assistance. Ann-Sofie Arvidsson, Malcolm Pettersson, and many others provided invaluable help in answering our questions about the institutional context. Funding for this project was provided by FORTE and Handelsbankens forskningsstiftelser. Harvard Kennedy School and NBER. Email: will_dobbie@hks.harvard.edu Uppsala University and IFAU. Email: hans.gronqvist@nek.uu.se dStockholm University. Email: susan.niknami@sofi.su.se e Stockholm University. Email: marten.palme@ne.su.se f Stockholm University. Email: mikael.priks@ne.su.se There has been a dramatic rise in the number of children growing up with an incarcerated parent. In the United States, for example, the proportion of children with an incarcerated father on any given day has nearly doubled over the last twenty-five years, increasing from 1.3% of children in 1990 to 2.2% of children in 2015. The proportion of children with an incarcerated father has also roughly doubled in most European countries over the same time period, albeit from a much lower starting point.1 Poor children are particularly likely to grow up with an incarcerated parent, with 6.5% of low-income children in our data having a parent incarcerated at some point during their childhood compared to only 1.9% for all children.2 These trends have fueled a long-standing debate on the causal effects of parental incarceration on children. Children growing up with an incarcerated parent fare worse than those without an incarcerated parent on a wide range of economic, behavioral, and educational outcomes (e.g., Johnson 2009; Murray, Farrington and Sekol 2012). Existing studies, however, have been unable to separate the causal effects of parental incarceration from pre-existing risk factors such as living in an unstable or abusive home, attending a low-quality school, and growing up in a high-crime neighborhood (e.g., Wildeman and Western 2010). The causal effects of parental incarceration are also theoretically unclear, as the removal of an abusive or negligent parent could improve a child’s home environment (e.g., Billings 2018). In this paper, we estimate the causal effects of parental incarceration on children’s shortand long-run outcomes in the context of the Swedish criminal justice system. Our work draws on two strengths of the Swedish setting. First, Swedish administrative data allow us to measure the impacts of parental incarceration for individuals who were between the ages of 3 and 14 at the time of their parent’s trial, a critical period in a child’s life when they may be particularly sensitive to shocks to the home environment (e.g., Carneiro et al. 2015). We are able to follow the children into adulthood and observe a wide range of important outcomes in the data, including teen criminal convictions, teen parenthood, high school graduation, and adult earnings and employment. The second strength of our setting is that we are able to isolate exogenous variation in parental incarceration using the random assignment of defendants to judges who are systematically more or less stringent. We measure judge stringency using a leave-out measure based on all other cases that a judge has handled during the same year. This leave-out stringency measure is highly predictive of parental incarceration decisions, but uncorrelated with case and family characteristics. Using our judge stringency measure as an instrumental variable (IV) for parental incarceration, we can identify the 1The available data suggest that the share of children with an incarcerated father in most European countries is about one-seventh the equivalent number in the United States in any given year, with slightly lower rates in the Nordic countries. The available data vary considerably across countries, however, with parental incarceration rates in many countries being imputed using the number of male prisoners and the likelihood of each prisoner being a father. See Wildeman and Western (2010) and Children of Prisoners Europe (2017) for additional details on these data for the United States and Europe, respectively. 2Information on the cumulative risk of parental incarceration, both overall and by subsample, is not available in most European countries. In the United States, it is estimated that approximately 12.5% of low-income children have a parent incarcerated at some point during their childhood. See Wildeman and Western (2010) and Murphey and Cooper (2015) for additional details on the U.S. data and Wildeman and Andersen (2015) for a comparison of the cumulative risks of paternal incarceration in the United States and other developed countries.