Reassess your requirement first. What is the problem you are trying to solve? Why do you want to prevent users from leaving their home directory? Isn't it rather that you don't want them to nose around in specific other directories -- such as the home directories of other users?
It is very difficult to prevent users from leaving their home directory. It is actually a bit silly, too (explanation follows). It is much simpler to prevent users from entering directories you don't want them to enter.
First off, yes you can give users a so-called restricted shell, see
man rbash. This will prevent them to
cd, but only inside that shell. If the user starts
nano (or any other program capable of opening a file) they can again open files anywhere on the system. As a matter of fact, a restricted shell does not prevent e.g.
The next step up is a root jail. More info on the community wiki and in this question. Though a root jail will lock a user inside a walled garden, within which she has access to nothing but the files and commands that you put there, root jails really are intended for isolating untrusted software rather than users. In particular, they are for software that needs to run with elevated priviliges -- hence a root jail.
A user, on the other hand, is trusted: he has had to authenticate and runs without elevated priviliges. Therefore file permissions suffice to keep him from changing files he does not own, and from reading things he must not see. World-readability is the default though, for good reason: users actually need most of the the stuff that's on the filesystem. To keep users out of a directory, explicitly make it inaccessible:
chmod -R o-rwx. Don't lock users in their homes (ooh! wouldn't we sometimes love to do that!) because there are secrets outside of it.
PS: Why locking users in their home directory is a bit silly:
Users need access to commands and applications. These are in directories like
/usr/bin, so unless you copy all commands they need from there to their home directories, users will need access to
/usr/bin. But that's only the start. Applications need libraries from
/lib, which in turn need access to system resources, which are in
/dev, and to configuration files in
/etc. This was just the read-only part. They'll also want
/tmp and often
/var to write into. So, if you want to constrain a user within his home directory, you are going to have to copy a lot into it. In fact, pretty much an entire base file system -- which you already have, located at