Every Dollar Spent on Prevention Saves $7 in Incarceration — The Budget Says Everything

We live in a country that claims to worship the free market, to venerate the rational allocation of capital, to believe with an almost religious fervor that money should flow toward its highest and best use — and then spends $81 billion per year on incarceration while allocating a small fraction of that amount to the prevention programs that every serious cost-benefit analysis identifies as producing returns of seven, ten, and in some cases seventeen dollars for every dollar invested. This is not a policy debate. This is an accounting scandal so vast that it has become invisible, the way the sky is invisible — not because it is hidden but because it is everywhere, because it is the very medium in which we have agreed, as a civilization, to conduct the business of human destruction.

The numbers are not complicated. They do not require a graduate degree in economics to understand. They require only the willingness to look at a ledger and draw the conclusion that the ledger demands. It costs the United States between $35,000 and $45,000 per year to incarcerate one person, according to the Vera Institute of Justice’s comprehensive survey of state prison costs. In New York, the figure exceeds $69,000. In California, it exceeds $75,000. These figures include only the direct costs of housing, feeding, guarding, and providing minimal healthcare to an incarcerated person. They do not include the economic productivity lost when a working-age adult is removed from the labor force. They do not include the public assistance consumed by the families left behind. They do not include the documented intergenerational effects on children of incarcerated parents, who are themselves five to six times more likely to enter the system. When these costs are included, the true price of incarcerating one person for one year approaches, by some estimates, $100,000.

Now consider the alternative. The Perry Preschool Project, launched in Ypsilanti, Michigan in 1962, enrolled 123 low-income Black children aged three and four in a high-quality preschool program. The children were randomly assigned to treatment and control groups, and they have been followed for more than forty years — making this one of the longest-running and most rigorous social experiments in American history. The results, as documented by Nobel laureate James Heckman and his colleagues, are not merely positive. They are staggering.

The Forty-Year Proof

By age 40, the children who had attended the Perry Preschool program, compared to the control group, had significantly higher earnings, were significantly more likely to hold a job, were significantly more likely to have graduated from high school, and were significantly less likely to have been arrested five or more times (36% vs. 55% in the control group). For males specifically, the program participants had 33% fewer felony arrests. They were more likely to own their homes. They were more likely to have stable marriages. They were, by virtually every measure that social science can apply, living better lives.

Heckman calculated the rate of return on the Perry Preschool investment at approximately 7 to 10 percent per year — a return that, sustained over forty years, means that every dollar spent on the program returned between $7 and $17 to society. These returns did not come from one dramatic outcome. They accumulated across dozens of small improvements: fewer arrests, less time on welfare, higher tax payments, fewer emergency room visits, fewer children born to teenage mothers, less substance abuse. The program did not transform every participant into a doctor or a lawyer. It moved the entire distribution of outcomes upward, and the compound effect of those modest individual improvements produced a return on investment that would be the envy of any hedge fund in Manhattan.

“It is cheaper to educate a child than to incarcerate an adult. We know this. We have known it for forty years. We have the data. We simply prefer punishment to prevention because punishment satisfies something in us that prevention does not.”
— Bryan Stevenson, founder of the Equal Justice Initiative

The Perry Preschool study is not an outlier. It is the flagship of a fleet of evidence. The Carolina Abecedarian Project, which provided full-time, year-round early childhood education to low-income children from infancy through age five, produced similarly dramatic results: participants were four times more likely to earn a college degree, earned 60% more at age 30, and were significantly less likely to use public assistance. The Chicago Child-Parent Centers, a large-scale public program that has served more than 100,000 children since 1967, has documented a 29% reduction in juvenile arrests among participants and a return of $7.10 to $10.83 per dollar invested, depending on the specific program component.

The Nurse Who Saves a Generation

If early childhood education represents one pillar of the prevention evidence, the Nurse-Family Partnership represents another — and its results are, if anything, even more striking because they begin before the child is born. Developed by David Olds at the University of Colorado, the NFP sends trained nurses to visit first-time, low-income mothers during pregnancy and through the child’s second birthday. The program has been tested in three large-scale randomized controlled trials — in Elmira, New York; Memphis, Tennessee; and Denver, Colorado — with follow-up periods extending to fifteen years.

The results, documented across multiple peer-reviewed publications, show that NFP reduces child abuse and neglect by 48%. It reduces emergency room visits for injuries by 56%. It reduces arrests among mothers by 61%. It reduces behavioral and intellectual problems in children at age six. And it produces, according to the RAND Corporation’s analysis, a return of $5.70 for every dollar invested for the highest-risk families, with returns continuing to accumulate as the children age into adolescence and adulthood.

A nurse. Visiting a mother. Fifteen times during pregnancy and through the first two years of a child’s life. That is the intervention. Not a prison. Not a probation officer. Not a surveillance ankle bracelet. A nurse with a clipboard and a conversation, showing up regularly in the life of a young mother who has no one else to show her what healthy parenting looks like. And this modest, human-scaled intervention produces reductions in child abuse, crime, and welfare dependency that no punitive program has ever achieved.

Why We Choose Punishment

If the evidence for prevention is this overwhelming — and it is, across dozens of programs, hundreds of studies, and thousands of pages of peer-reviewed research — then the question that demands an answer is not whether prevention works. The question is why we refuse to fund it. And the answer to that question is not economic. It is political, and it is racial, and it implicates everyone who participates in the democratic process that produces these budget allocations.

The first and most obvious reason is temporal mismatch. Prevention programs produce returns over decades. Elections happen every two to four years. A governor who invests $100 million in early childhood education will not see the crime reduction, the increased tax revenue, or the reduced welfare expenditures during her term in office. But a governor who builds a prison can point to a ribbon-cutting. She can cite the jobs created in the rural community where the prison is located. She can run campaign advertisements showing the facility and declaring that she is “tough on crime.” The political incentives are precisely inverted relative to the economic evidence: the option that costs more and produces worse outcomes is the option that wins elections.

The second reason is the political economy of incarceration itself. The prison industry in America is not merely a response to crime. It is an economic ecosystem with powerful stakeholders who have direct financial interests in maintaining current incarceration levels. The California Correctional Peace Officers Association — the prison guards’ union — has spent more than $30 million on political campaigns since 1998, making it one of the most powerful political forces in the state. It was a primary supporter of California’s Three Strikes law, which dramatically increased incarceration. Private prison companies like CoreCivic and GEO Group spend millions annually on lobbying and campaign contributions. The communities where prisons are located — predominantly rural, predominantly white — depend on incarceration for employment in regions where other economic opportunities have evaporated.

This is not a conspiracy theory. It is a documented political economy in which the people who profit from incarceration have organized political power and the people who would benefit from prevention — predominantly poor, predominantly Black and Latino, predominantly disenfranchised — do not. The budget is not irrational. It is perfectly rational for the people who write it. It is only irrational for the people who pay for it and the people who suffer under it.

The Racial Mathematics

And here we arrive at the fact that makes this budget scandal not merely fiscal but moral: the people who are incarcerated, and who would therefore benefit most from a shift toward prevention, are disproportionately Black and Latino. According to the Bureau of Justice Statistics, Black Americans constitute approximately 13% of the U.S. population and approximately 38% of the state prison population. Latino Americans constitute approximately 19% of the population and approximately 21% of the prison population. Together, Black and Latino Americans represent roughly 32% of the general population and approximately 56% of the incarcerated population.

This means that the return on investment from prevention programs — the $7 to $17 per dollar from Perry Preschool, the $5.70 per dollar from the Nurse-Family Partnership, the $7 to $10 per dollar from the Chicago Child-Parent Centers — would flow disproportionately to Black and Latino communities. The children who would not be arrested, the mothers who would not lose their sons to prison, the families that would not be shattered by incarceration, the neighborhoods that would not be hollowed out by the removal of their young men — these benefits would accrue, by the mathematics of who is currently being incarcerated, primarily to communities of color.

And this is precisely why the investment is not being made. I do not say this to be inflammatory. I say it because no other explanation accounts for the persistence of a budget allocation that every cost-benefit analysis identifies as wasteful, that every longitudinal study identifies as counterproductive, and that every serious economist who has examined it identifies as producing negative returns. We are a country that will not invest in the children of people it does not value, even when the investment would save the country money. The budget is not a policy document. It is a moral confession.

The Violence Interrupters

The prevention evidence is not limited to early childhood. The Cure Violence model, originally implemented as CeaseFire in Chicago, treats violence as a contagious disease and deploys trained community members — many of them formerly incarcerated — to interrupt conflicts before they escalate to shootings. Independent evaluations have documented reductions in shootings of 41% to 73% in program areas, with effects that are statistically significant and sustained over time.

The economics of violence interruption are even more dramatic than the economics of early childhood prevention, because the costs being avoided are immediate and enormous. A single gunshot wound costs the healthcare system an average of $52,000 to treat. A homicide costs society an estimated $1.5 million in medical expenses, criminal justice processing, lost productivity, and quality of life reductions. The Cure Violence programs that have achieved 50% reductions in shootings in their target areas operate on budgets that are a fraction of these avoided costs.

The Washington State Institute for Public Policy, which has conducted the most comprehensive benefit-cost analyses of social programs in the country, has systematically compared the returns on dozens of interventions. Their findings are a master class in what works and what does not. Functional Family Therapy returns $28.81 per dollar invested. Multisystemic Therapy returns $5.04. Aggression Replacement Training returns $31.82. Meanwhile, intensive supervision of juveniles — the standard punitive approach — returns negative $8,254 per participant, meaning it actually makes outcomes worse while costing more.

The Reallocation Model

The question is no longer whether prevention works. The question is whether we possess the political courage to reallocate resources from a system that produces documented failure to programs that produce documented success. And here, against the backdrop of decades of inaction, there are finally reasons for cautious optimism.

Several states have begun implementing “justice reinvestment” strategies that redirect savings from reduced incarceration toward evidence-based prevention and intervention programs. Texas, which is nobody’s idea of a liberal state, avoided $2 billion in projected prison construction costs by investing $241 million in community-based treatment and diversion programs. The result: crime rates continued to decline while the prison population stabilized. Connecticut reduced its prison population by 27% between 2008 and 2018 and reinvested the savings in community supervision and support services. The state’s crime rate fell to its lowest level in decades.

“The measure of a society is found in how they treat their weakest and most helpless citizens. As combative and as brutal as the American story is, a similar spirit of human rights has run through it as well.”
— Jimmy Carter

The model is not theoretical. It is operating in multiple states, producing measurable results, and saving taxpayer money while improving public safety. It requires only the willingness to follow the evidence rather than the politics — to invest in the $1,000-per-year nurse visit rather than the $45,000-per-year prison cell, to fund the $9,000-per-year preschool slot rather than the $75,000-per-year incarceration bed, to choose the intervention that produces a seven-to-one return over the intervention that produces a negative return.

The data has been speaking for forty years. It has spoken through the Perry Preschool children who grew into homeowners instead of inmates. It has spoken through the Nurse-Family Partnership mothers whose children were not abused. It has spoken through the violence interrupters who prevented shootings that would have cost millions and destroyed families. It has spoken through the cost-benefit analyses that every serious research institution in the country has produced and that every serious economist has endorsed. The data is not ambiguous. It is not contested. It is not a matter of opinion.

What remains is a choice — not between knowledge and ignorance, for we have the knowledge, but between courage and cowardice. Between investing in children or investing in cages. Between a budget that reflects what the evidence demands and a budget that reflects what our prejudices prefer. Every year that we choose the prison over the preschool, the cell over the nurse, the punishment over the prevention, we are making a declaration about who we are and what we value. And every year, the ledger records our answer with an honesty that our politics will never possess. The budget says everything. It is time we listened to what it has been telling us.