Empirical evidence shows that unemployment influences levels of incarc
eration. Theory attributes this relationship to the state's attempt to
control labor surpluses. Studies testing the Rusche and Kirchheimer (
1939) thesis yield questionable results, however, because they rely on
convicted offender data. Using longitudinal data and a Box-Jenkins Au
toregressive-lntegrated Moving Average (ARIMA) modeling method, we inv
estigate the effect of unemployment rates on pretrial incarceration ra
tes. We include controls for arrest rates, jail capacity, and three co
urt processing variables. Although our preliminary bivariate analysis
revealed that the aggregate unemployment rate was significantly and po
sitively related to pretrial incarceration for misdemeanors, this corr
elation became nonsignificant in the ARIMA analysis. The relationship
between unemployment and the incarceration rate for pretrial felony de
fendants was also nonsignificant. Taken in total, our results suggest
that the Rusche and Kirchheimer thesis overstates the importance of un
employment in explaining levels of incarceration.