Incarceration and Unemployment: U.S. and Europe

Ever since Bryan offered this bet on future unemployment rates in the U.S. and Europe, I’ve been wondering: how do incarceration rates affect those numbers?

Europe has consistently higher unemployment than the U.S., but the U.S. has far and away the highest incarceration rate in the world — .75% of the population. (World Prison Population List [PDF], compiled since 1992 by Roy Walmsley of the International Centre for Prison Studies at King’s College, London.)

Only Russia comes even close, at .63%. (Canada: .12%. Australia: .13%. China .18%. Germany .09%.) Our rate is four to eight times that of most other countries.

Prisoners aren’t part of the unemployment calculation. They’re not counted as part of the work force, and they’re not counted as unemployed. There are various arguments about whether that makes sense (feel free to comment), but if we include them in the calculations, what do unemployment rates look like? In particular, Bryan’s bet makes me curious: How does U.S. unemployment compare to the EU15?*

Here are the numbers for 2008. Calculations based on labor force and unemployment figures from Eurostat.

Percent of (total work force + incarcerated population)

Incarceration Unemployment Total
EU15 0.2% 7.1% 7.3%
U.S. 1.5% 5.8% 7.3%

In 2008, all of the difference between EU15 and U.S. unemployment rates is accounted for by the prison population. The cynical view would say that we just imprison our unemployed, which doesn’t strike me as the most economically efficient arrangement. (Here putting aside any foolish notions of Christian charity or the like.)

I would have liked to do a fever graph comparing unemployment rate, incarceration rate, and combined rate over the years, but the data’s only available in fairly intractable country-by-country form, and I didn’t have time or energy for all the cutting and pasting. (I wrote to Mr. Walmsley and he was nice enough to reply, but he was unable to provide the data in a more usable form.)

Note: Eyeballing the data, I do not think incarceration accounts for the (significantly larger) differences in previous years. (I would suggest that the additional difference is mostly the result of labor-market and other market rigidities imposed by unions and government regulation — not the result of redistribution. But that’s another post.)

Perhaps one of my gentle readers might have the time and inclination to compile those years? Or, write to Roy Walmsley and ask him to provide a simple table of the data that only he has: prison population by country and year. All the other data, at least for OECD countries, is easily available.

* Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, United Kingdom.



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7 responses to “Incarceration and Unemployment: U.S. and Europe”

  1. Chris Avatar

    How does this compare for other definitions of unemployment? ie: U4 – Those who have given up finding work

    One would expect that in countries that have high structural unemployment, proportionately more people would fall into U4 and above.

  2. Asymptosis Avatar

    Hey babe, the data’s out there. You tell me.

  3. Chris Avatar


    I could not find a European equivalent of U4, but I did find unemployment statistics over the past decade. The average unemployment from Jan. 2000 to March 2010 for the United States was 5.6. Over the equivalent time period it was 8.34 for Euro15 (variance: 1.25 and 0.809). The United States rate appears to be much more prone to shocks though. Excluding the recession years of 2009 and 2010, the average rates are 5.1 and 8.21 respectively (variance: 0.86 and 0.73). So, market flexibility vs. job security; which is ultimately better is a matter of debate.

    Where did the 1.5% incarceration rate come from? That’s double 2007’s rate.

  4. Asymptosis Avatar

    1.5% of (workforce + incarcerated), not of the total population.

  5. Chris Avatar

    Ah, that makes sense.

  6. urgs Avatar

    Try employment numbers, instead of unemployment ones. Not quite perfect either, but more reliable for international comparision.
    (left, most viewed statistics, there they are, right below unemployment ones for Euroep).

    I think there must be some other statistics that use the same methodology arround the world. Just compareing the national ones poses so many problem beyond the prisons.

  7. Asymptosis Avatar

    I used unemployment because it factors in the size of the work force, which employment does not. Gives the best indication of how many are involuntarily unemployed. (I have to assume that a very small percentage of prisoners is voluntarily incarcerated.)

    I’m aware that unemployment statistics are problematic, but the EU15, especially aggregated, is more consistent than the rest of the world, and is at least pretty consistently measured over the years. It’s the best data we’ve got.

    “The unemployment rate according to the International Labour Organization definition is the most widely used labour market indicator because of its international comparability and relatively timely availability.”