In this literature synthesis, research concerning the effects of parental incarceration on children is reviewed. Literature from across disciplines is synthesized to advance the understanding of how parental incarceration affect children, as well as to propose vicarious reinforcement and punishment as a potential mechanism to explain positive outcomes of this type of separation. It has been a predominant view that this population is at risk for serious negative outcomes, like behavioral issues, even before parental incarceration. It is obvious that children with parents in prison or jail do constitute an especially fragile population group needing urgent attention for social, educational, and psychological services. However, research findings are mixed and several problems with research on this population have been identified, such as issues with identification, access, as well as research quality. The purpose of this review is to summarize recent research findings on the differential effects of parental incarceration on educational outcomes, as well as introduce vicarious reinforcement and punishment from Bandura's social learning theory as possible mechanisms that safeguard these children from negative outcomes. Implications for future research and intervention development are offered.