The Impact of Prisons on Employment Growth in Rural U.S. Counties, 1997-2004

Source: Shaun Genter, Gregory Hooks, Clayton Mosher, Washington State University, January 2013

In this study of prison privatization we draw on the insights of a recent body of literature that challenges a widespread belief that prisons help to spur employment growth in local communities. We look to these studies to provide an empirically and theoretically grounded approach to addressing our research question: what are the benefits, if any, to employment growth in states that have privatized some of their prisons, compared to states with only public prisons? Our research makes use of a large, national, and comprehensive dataset. By examining the employment contributions of prisons, as recent research has done, we were able to corroborate the general findings of this research. To study prison privatization we distinguish between states in which privatization has grown rapidly and those states in which privatization has grown slowly (or not at all). Our findings lend support to recent research that finds prisons do not improve job prospects for those communities that host them. We contribute to this literature by demonstrating that new prisons in states in which privatization is surging impede employment growth in the host community. To explain this we highlight the significant reduction in prison staffing – in both private and public prisons – where privatization is growing quickly.