Kevin Schnepel, University of Sydney, School of Economics
The historically unprecedented size of the U.S. criminal justice system has necessitated the development of diversion programs to reduce caseloads as a cost containment strategy. Court deferrals, which allow felony defendants to avoid formal convictions through probation, are one example. Using two discontinuities in deferral rates in Harris County, Texas, separated by 13 years, we find consistent evidence that diversion reduces reoffending and unemployment among first-time felony defendants. Similar benefits are not observed for repeat offenders suggesting felony record stigma as a key mechanism. Young, African American men drive the total effect, a pattern consistent with over-targeting by law enforcement.