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The Economic Impacts of the Prison Development Boom on Persistently Poor Rural Places

Tracey L. Farrigan and Amy K. Glasmeier

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Summary: Prison construction was a noticeable component of economic development initiatives in rural places during the 1980s and the 1990s. Yet, few comprehensive ex post-empirical studies have been conducted and therefore the literature remains inconclusive about the economic impacts of prisons. Following a temporal overview of the geography of prison development and associated characteristics, this research employs quasi-experimental control group methods to examine the effects of state-run prisons, constructed in rural places between 1985 and 1995, on county earnings by employment sector, population, poverty rate, and degree of economic health. Our analysis suggests that prisons have had no significant economic effect on rural places in general, but that they may have had a positive impact on poverty rates in persistently poor rural counties, while also associated with diminishing transfer payments and increasing state and local government earnings in places with relatively good economic health. However, we found little evidence to support the conclusion that prison impacts were significant enough to foster structural economic change.

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