Custodial versus non-custodial sentences: Long-run evidence from an anticipated reform

Résumé 0

We study the relative impact of custodial and non-custodial sentences on later crime and labor-market outcomes in Denmark, a country where detention conditions are particularly good. To do so, we take advantage of a large-scale reform of the Danish legislation implemented in 2000, whereby incarcerationwas replaced by a non-custodial sentence for most drunk-driving crimes, which represented a quarter of all custodial sentences passed in 1999. Our first key finding is that stakeholders anticipated the consequences of the reform and that wealthier offenders managed to postpone their trial until after the reform came into force to avoid prison. To measure the relative impact of incarceration, we therefore use a novel instrumental variable approach exploiting quasi-exogenous variation in the probability of being tried after the reform, and therefore incarcerated, based on offenders’ crime date. We follow sampled individuals over a 15-year period and find that incarcerated offenders commit more crimes and have weaker ties to the labor market after release. Additionally, first-time offenders are more negatively affected than repeat offenders.