Almost three million children in the U.S. have a parent in prison. Do these missing parents harm child development or, conversely, remove a negative influence?

Imprisoning a parent may have many effects on a child. On the negative side, parental incarceration could create emotional trauma and impose financial hardship. Often childcare arrangements are disrupted and in many cases incarceration triggers house and school moves. On the other hand, we can also think of reasons for parental incarceration to be positive. Removing a violent parent or a negative role model from the household can create a safer environment for the child.

There is a literature that looks at the broad correlations between parental incarceration on children’s outcomes. This finds negative associations between parental incarceration and a host of important variables such as mental health, education, and crime. However, households with incarcerated parents are disadvantaged along many dimensions. For example, such households are more likely to experience domestic violence and mental illness, and be involved in drug use.

In her job market paper, “The Cost of Bad Parents: Evidence from the Effects of Parental Incarceration on Children’s Education”, UCLA PhD student, Carolina Arteaga, estimates the causal effect of parental incarceration on children’s educational attainment. She does this in the context of Colombia, using random differences in judge leniency to identify causal effects. Intuitively, she compares the children of two identical prisoners, where one is assigned to a lenient judge, and the other to a strict judge.

Carolina finds that parental incarceration increases educational attainment by 0.8 years. With an average schooling of 7 years, this corresponds to an increase of 11% in education. In the study, she also finds that the benefit of parental incarceration increases when parental quality decreases, that this positive effect is larger for boys, when the parent is incarcerated for a violent crime, and when the mother is the one going to prison.

Her findings suggest that on average, parents who are on the margin of incarceration in Colombia are likely to reduce their child’s educational attainment if they instead remain in the household. These findings are consistent with previous research that shows how removing a violent parent or negative role model from the household can create a safer environment for a child. Criminal parents may also deplete economic resources, and the economic contribution of defendants is likely to be small. Parental incarceration may also reduce the intergenerational transmission of violence, substance abuse, and crime. Lastly, parental incarceration may result in the child being placed with an alternative caregiver who has better resources to care for the child. Indeed, she finds that after an episode of parental incarceration, children often move in with their grandparents. They are also more likely to move to a household with higher socioeconomic status.

Carolina Arteaga will graduate this summer, and will be joining the Department of Economics at the University of Toronto.