Average labor productivity indexes were calculated for prisons, jails, and juvenile correctional facilities. Probation and parole could not be measured because of a lack of adequate output data. State and local governments spent almost $29 billion in fiscal 1992 on correctional services. Capital expenditures accounted for approximately 15 percent, operations about 85 percent. Because more than three-quarters of all operational expenditures were devoted to labor compensation, its cost is a good indicator of the amount of resources devoted to correctional operations. There were more than 540,000 State and local government correctional employees in 1992. The average annual increase in employment between 1967 and 1992 was more than 6 percent. State and local correctional operations were one of the fastest growing government services. Prison output and employment both increased rapidly during the measured period; however, there has been a larger proportional increase in labor compared to output. This, in turn, has led to decreases in labor productivity. The summary correctional labor productivity index for the three enterprises decreased at an average annual rate of 1.5 percent between 1973 and 1992; beginning in 1982 there was a decided decline, with decreases every year from 1982. The average annual decline over the 1982-92 period was 3.3 percent. 126 notes, 64 tables, and 11 charts