The Racialized Consequences of Jail Incarceration on Local Labor Markets

As a racialized labor market institution, the criminal justice system shapes racial patterns in local labor markets through processes of exclusion and marginalization. How do local county jails contribute to these dynamics? To examine that question, the relationship between county-level jail and employment rates is examined across the U.S. between 2007 and 2017. The study uses a System Generalized Method of Moments (GMM) dynamic panel model approach that structurally controls for simultaneous determination and other sources of endogeneity. A racial stratification analysis identifies a negative relationship between jail and employment in the urban counties with the highest percentage of Black residents aged 15 to 64, whereas areas with the lowest percentage of Black residents have a positive relationship between jail and employment. These racially differential spillover effects suggest that the impact of jail incarceration on employment is significantly racialized at this level of analysis.