Four in 10 children in the United States grow up in households in which a parent or co-residing adult faced at least one criminal charge, were convicted of a felony or spent time in prison, a University of Michigan study shows.

This dwarfs estimates from the Bureau of Justice Statistics that less than 1 in 40 children have a parent in prison in a given year, says Michael Mueller-Smith, assistant professor of economics and faculty associate at the Population Studies Center at the U-M Institute for Social Research.

Prior efforts to quantify the extent of crime and justice spillovers within households have been hampered by severe data limitations, he says. Federal data collection fails to capture nonincarceration events, track intergenerational spillovers within families that depart from the nuclear family model or follow children over time.

“Data limitations have left us in the dark on just how many kids grow up in households with justice involvement,” Mueller-Smith said. “That we find estimates with close to half of U.S. children having intergenerational exposure to crime and justice is a wake-up call to the failures of our public policy to date. Even if the justice system were completely overhauled today, we will be living with the damage done to current and former generations for decades to come.”

Using data from the U.S. Census Bureau, Treasury Department and Criminal Justice Administrative Records System, Mueller-Smith and colleagues were able to overcome data limitations that have constrained this area of research for decades.

In addition to finding dramatically higher rates of intergenerational exposure overall, the researchers found that child exposure is heterogeneous in the U.S. population. More than 60% of Black and Native American children and kids from households with below-median income have intergenerational exposure to the justice system—twice the rate of white children.

“Circumstances during early childhood play an important role for a range of lifetime outcomes. It is quite alarming that the modal experience for minority children in the U.S. is one of indirect exposure to the criminal justice system,” said Brittany Street, a co-author of the study and assistant professor of economics at the University of Missouri. “These findings have important implications not just for criminal justice policy, but our overall social policy in the U.S. more generally.”

Early life exposure is highly correlated with a range of negative child development outcomes, including cognitive difficulty, being behind in school, teen fertility, teen crime and death by age 18, even after controlling for a range of factors including household income, place of birth, age, sex and race, the researchers say.

The expansive prevalence, demographic heterogeneity and estimated relationship with child outcomes provide strong evidence that the justice system is a major factor in the intergenerational propagation of economic inequality and racial disparities in the U.S.

This research was performed by economists from the University of Michigan, University of Missouri and U.S. Census Bureau.