Objectives This study estimates the causal effect of paternal incarceration on children's educational outcomes measured at the end of compulsory schooling (9th grade) in Denmark. Methods I use Danish administrative data and rely on a sentencing reform in 2000, which expanded the use of non-custodial alternatives to incarceration for traffic offenders, for plausibly exogenous variation in the risk of experiencing paternal incarceration. Results The results show that paternal incarceration does not affect academic achievement (grade point average), but that it does reduce the number of grades obtained, and-most importantly-roughly doubles the risk of not even completing compulsory school and getting a 9th grade certificate. These findings are driven mainly by boys for whom paternal incarceration appear to be particularly consequential. Conclusions The findings presented in this study highlight the presence of unintended and collateral consequences of penal policies-even in the context of a relatively mild penal regime. Effects are, however, estimated for a subgroup of Danish children experiencing paternal incarceration, and how results translate to other subgroups and beyond the Danish context is open for speculation.