Today, the Council of Economic Advisers (CEA) released a report on the economic costs of crime, and the effectiveness of programs to reduce recidivism. Please see below for the executive summary and read the full report here.

Crime imposes a significant burden on Americans’ well-being and tax-financed resources. These costs are amplified by a cycle of crime that results in re-arrest rates for released American prisoners in excess of 50 percent. Rigorous and evidence-based prison reforms are proposed to break the crime cycle, thereby reducing future crime and lowering incarceration expenditures by facilitating more successful re-entry upon prison release. In this policy brief, CEA reviews the evidence on the underlying factors that determine the value of such prison programs and provides estimates on their rates of return. There are numerous programs that have been tried in one form or another over many decades. We do not aim to cover the entire scope of prison reform programs but focus instead on three main categories: programs that address mental health, substance abuse, and education and that are delivered inside correctional facilities.

We find that there is great variation in the effectiveness across programs so that reallocation of budgets from poorly to well performing programs may both lower spending and improve results. In addition, CEA finds evidence that certain individual programs can reduce crime as well as reduce spending by lowering long-run incarceration costs. Programs that save at least one dollar in crime and incarceration costs for every dollar spent are deemed cost effective. More specifically, with a focus on rigorous studies of the programs that have been previously implemented, CEA finds that, on average, programs that address the prisoner’s mental health or substance abuse problems may reduce the cost of crime by about $0.92 to $3.31 per taxpayer dollar spent on prison reform and long-run incarceration costs by $0.55 to $1.96, for a total return of $1.47 to $5.27 per taxpayer dollar.

Despite these positive returns, there are many programs, such as education, where the evidence base is inconsistent and rates of return more uncertain. Given this uncertainty, CEA estimates how much rates of recidivism would have to be reduced in order for the programs to break even given their costs. We calculate that educational programming needs only a modest impact on recidivism rates of around 2 percent in order to be cost effective.

Overall, increased investment in better evidence is needed to guide future investments into programs to reduce recidivism. Many programs, even if they are found to be cost effective may have small sample sizes or unique characteristics that may be difficult to replicate or scale up, and some studies with high-quality research designs are too dated to provide needed insight. Carefully designed, broad-based national programs that target a wide variety of offenders in conjunction with carefully designed empirical evaluations would improve the ability of policymakers to allocate criminal justice funds to achieve the greatest possible social benefits.