Racially Charged Police Enforcement Has Cost the U.S. Economy $53 Billion to $220 Billion in Lost Productivity

Abstract

There is a major difference in the drug arrest rate and incarceration rates between Black and White individuals. However, the drug use rate across the two groups is similar (and has been over time). This study estimates the lost productivity over time of people arrested on drug charges because they are Black. Ceteris Paribus, if those using the drugs were White, instead of Black, at the point of arrest and incarceration, what would have been their additional productivity levels over their lives? In this study I estimate this lost productivity to be $53 billion to $220 billion from 1980–2018 (in 2019-dollars), suggesting that the Lucas wedge is substantial for racial drug arrests.

Keywords

racial discrimination drug arrests lucas wedge

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