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This paper compares actual U.S. crime and incarceration rates to predicted rates from cross-country regressions. Global cross-country regressions of crime and incarceration on background characteristics explain much of the variation between other countries. But the estimated models predict only one-fourth of U.S. incarceration and not all of U.S. crime. The coincidence of the non-negative U.S. crime residuals with the very large positive U.S. incarceration residual constitutes a puzzle. The two pieces fit together only if the residual U.S. incarceration does not contribute to a reduction in crime, except to the extent an omitted criminogenic factor pushes up U.S. crime. The paper quantifies this relationship. Drawing on additional evidence from comparative and U.S.-specific data, it argues that the puzzle's most plausible solution combines low effectiveness of mass incarceration with omitted criminogenic factors such as U.S. neighborhood segregation.
