Calls for criminal justice reform have been mounting in recent years, in large part due to the extraordinarily high levels of incarceration in the United States. Today, the incarcerated population is 4.5 times larger than in 1980, with approximately 2.2 million people in the United States behind bars, including individuals in Federal and State prisons as well as local jails. The push for reform comes from many angles, from the high financial cost of maintaining current levels of incarceration to the humanitarian consequences of detaining more individuals than any other country. Economic analysis is a useful lens for understanding the costs, benefits, and consequences of incarceration and other criminal justice policies. In this report, the first chapter examines historical growth in criminal justice enforcement and incarceration along with its causes. The following chapter examines state-by-state trends to compare the extent to which state and local governments are investing in education and in corrections. More specifically, Chapter Two uses extant data from the Bureau of Justice Statistics, National Center for Education Statistics, U.S. Census Bureau, and other sources to present a snapshot of the changes in state and local expenditures for corrections and education between two points in time – 1979-80 to 2012-13 – both nationally and by state.