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Every year, millions of American children experience the incarceration of a family member. This paper provides the first causal estimates of the effects of incarceration of parents and siblings in the US. Contrary to conventional wisdom, we show that this significantly reduces criminal activity. We also show that parental incarceration improves long-run socioeconomic outcomes for children and can reject policy-relevant effects on short and medium-run outcomes including academic performance and teen parenthood. These benefits can be partially explained by deterrence and partially by removing children from unstable home environments.