Conviction, Partial Adverse Selection and Labor Market Discrimination
AbstractThis paper analyzes data from the 1999-2000 sweep of the U.K. National Child Development Study to investigate convicted individuals prospects in the labor market. Decomposition analysis makes it clear that convicted workers are in fact discriminated against as compared to non-convicted ones, both in terms of employment and wage. Adopting a simple theoretical model accounting for the problem of partial adverse selection in the hiring process, I show that discrimination can be explained not only in terms of economic stigma, but may also derive from incomplete enforcement in detecting crime and punishing offenders. In fact, while firms may apply economic stigma to recover the expected extra-costs from hiring convicted workers, rationally behaving firms may also need to recover unforeseen extra-costs deriving from the hiring of non-convicted offenders as workers. Further stigma increases with the probability of offenders to commit crimes and with the expected level of extra-costs in hiring convicted offenders, while it decreases with the probability of convicting the offenders.
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Bibliographic InfoArticle provided by De Gruyter in its journal Review of Law & Economics.
Volume (Year): 6 (2010)
Issue (Month): 2 (December)
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Web page: http://www.degruyter.com
Other versions of this item:
- Dario Sciulli, 2010. "Conviction, Partial Adverse Selection and Labour Market Discrimination," Department of Economics University of Siena 594, Department of Economics, University of Siena.
- J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
- K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
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- Sciulli, Dario, 2010. "Conviction, Gender and Labour Market Status: A Propensity Score Matching Approach," MPRA Paper 25054, University Library of Munich, Germany.
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