Impacts of Private Prison Contracting on Inmate Time Served and Recidivism

This paper examines the impact of private prison contracting by exploiting staggered prison capacity shocks in Mississippi. Motivated by a model based on the typical private prison contract that pays a per diem for each occupied bed, the empirical analysis shows that private prison inmates serve 90 additional days. This is alternatively estimated as 4.8 percent of the average sentence. The delayed release erodes half of the cost savings offered by private contracting and is linked to the greater likelihood of conduct violations in private prisons. The additional days served do not lead to apparent changes in inmate recidivism. (JEL H76, K42)