Economist Writing Every Day

Newly published research from Finlay et al takes the deepest dive yet on how the costs of the criminal justice system impact people’s lives going forward. Leveraging the new (and phenonomenal) integrated data from CJARS, the authors look at 9 (!) separate discontinuous increases in the fines and fees associated with misdemeanor and felony convictions. The paper is exceptionally well executed, connecting criminal and earnings records to estimate a pooled seemingly unrelated regression of those 9 separate treatments. They observe null effects on future convictions, earnings, and living conditions. So does this mean we can soak those convicted for every penny in their pockets without consequence? No, I don’t think so (and I strongly doubt the authors do either). Does it mean that people, such as myself, need to soften their calls to stem the growing tide of law enforcement as local regressive taxation scheme? Maybe in some cases, but I do think additional context matters here. A couple quick comments, in no particular order:

1. Of the 9 increased fine and fee treatments, 4 are small (≤$65), 5 are large (≥$200). Four of the large increases are explicitly raising the fines and fees of traffic offenses (DUIs). It’s not unfair to summarize the legislated treatments here as mild for those more likely to be in a state of poverty since you have to have access to a car to receive the larger treatments.
2. There’s always a little bit of a Rorschach test with RD designs, even when the differences are or are not statistically significant. In this case we observe null effects, but it sure seems like something happens with convictions in the first 100 days after reform and then it returns to trend (see below in Panel A). That feels like a system updated the de facto rules to accomodate the new de jure. As for earnings, it’s always tough when slopes change sign (Panels B and C), but the differences aren’t significant.
3. In the subgroup analysis there are two significant increases in recidivism, most notably a 4.7% increase in recidivism for those in the lowest predicted income quartile. This isn’t an enormous effect, but when it comes to what I consider to be a regressive tax, then focusing on the lowest income quartile isn’t an exercise in p-hacking, it’s to some degree the point of the endeavor. Combine that with the fact that the overweighting of the high magnitude treatments on driving offense can be expected to attenuate the potential effect on treated individuals with low incomes, a 4.7% increase in recidivism doesn’t seem that small anymore.

This is good research, but like most contributions it isn’t the last word. The growing use of fines and fees as revenue sources is a complex and, in many ways, adaptive system that exists to generate revenue for local governments whose revenue apparatuses hamstrung in countless ways, frequently struggling to keep the lights on (whether those lights should necessarily be on is a whole separate question). When they’re looking for that revenue, many (but not all) will arrive at the conclusion that they can only get so much much from poor people. Sometimes, such as with traffic offenses, the poorest individuals that do get caught in this system aren’t necessarily the intended targets, but rather the collateral damage. When we’re looking for that collateral damage, it’s important to know both where that damage is occuring and where it is being mitigated by local adaptation, particularly that which exists outside of the laws as written.