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Big Prisons, Small Towns: Prison Economics in Rural America

February 01, 2003
Ryan King, Marc Mauer, and Tracy Huling
Although prisons create jobs, an examination of rural counties in New York reveals that prison building has few economic benefits for local communities.

 In the 1980s, as a skyrocketing prison population created a demand for prison expansion, prison hosting emerged as a potential catalyst for economic growth in struggling rural areas.

With an average of 35 jobs being created for every 100 inmates being housed, and state prison populations increasing by an annual average of 8.1% from 1985 to 1995, local officials began to consider prisons as an economic development tool. Since rural communities had witnessed a series of failed redevelopment plans, prisons appeared to offer a politically expedient way in which to address the persistent poverty and population out-migration that had plagued them for decades.

In order to attract this construction, local officials have often made generous offers in order to portray their site as an ideal choice. In a prison siting experience in Texas, for example, the town of Abilene offered an incentive package of over $4 million to the state. The package included a 316-acre site for the prison, as well as over 1,100 acres of farmland adjacent to the facility, capable of generating $500,000 in cotton per year. Town officials also proposed to build roads into the facility and to provide housing for administrators and corrections officers. Use of a private plane and hangar for state officials, computers, and upgrades to the communications and public works infrastructure were also promised.

Calvin Beale, a demographer at the United States Department of Agriculture, has comprehensively documented the rise in rural prison siting. Since 1980, approximately 350 rural counties have sited prisons. From 1980 to 1991, 213 adult facilities were opened in rural areas, housing more than half of all prisoners residing in newly constructed institutions. This is in contrast to the 38 percent of inmates from older facilities located in nonmetro areas, which represent less than one-quarter of the total United States population. From 1992 to 1994, another 83 prisons were opened in nonmetro counties, constituting sixty percent of new prison construction.

Despite the popularity of prison hosting, little empirical analysis has been undertaken to test the validity of using a prison as a tool for economic recovery. Instead, much of the literature has focused upon theoretical modeling of the expected impact of prison siting on such indicators as employment, property values and public safety. The handful of empirical pieces that have been conducted concerning prison siting and economic development have taken a very narrow approach. Those that have directly addressed work creation have simply measured the total expected number of positions, while ignoring how those positions are actually filled.

In order to assess the degree to which prisons aid local economies, this study examines 25 years of economic data for rural counties in New York, covering both counties in which prisons were built and those without any facilities.

To read the report, download the PDF below.

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