The Incarceration Penalty and Black-White Economic Inequality: The Case of Baltimore

Abstract

This paper investigates income and wealth gaps by household incarceration history within and across racial groups using the Blinder-Oaxaca decomposition. We study this in the context of 2017 Baltimore. We find that households exposed to incarceration have lower levels of income and wealth and that these differences are largest for White households. Additionally, we find that Black households without incarceration exposure fare no better in household income than White households with exposure but have higher levels of wealth (driven by lower debt levels). These results highlight the importance of studying the relationship between the criminal legal system and economic inequality.