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Effect of Employer Access to Criminal History Data on the Labor Market Outcomes of Ex-Offenders and Non-Offenders

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  • Keith Finlay

Abstract

Since 1997, states have begun to make criminal history records publicly available over the Internet. This paper exploits this previously unexamined variation to identify the effect of expanded employer access to criminal history data on the labor market outcomes of ex-offenders and non-offenders. Employers express a strong aversion to hiring ex-offenders, but there is likely asymmetric information about criminal records. Wider availability of criminal history records should adversely affect the labor market outcomes of ex-offenders. A model of statistical discrimination also predicts that non-offenders from groups with high rates of criminal offense should have improved labor market outcomes when criminal history records become more accessible. This paper tests these hypotheses with criminal and labor market histories from the 1997 cohort of the National Longitudinal Survey of Youth. I find evidence that labor market outcomes are worse for ex-offenders once state criminal history records become available over the Internet. Non-offenders from highly offending groups do not appear, however, to have significantly better labor market outcomes. The sign of the non-offenders estimates are consistent with the predictions of the statistical discrimination model, but the estimates are not significantly different from zero. These estimates may be confounded by a short sample period and ongoing human capital investments, but the research design provides a unique setting for testing theories of statistical discrimination.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13935.

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Date of creation: Apr 2008
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Publication status: published as Keith Finlay. "Effect of Employer Access to Criminal History Data on the Labor Market Outcomes of Ex-Offenders and Non-Offenders," in David H. Autor, editor, "Studies of Labor Market Intermediation " University of Chicago Press (2009)
Handle: RePEc:nbr:nberwo:13935

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  1. Devah Pager, 2003. "The mark of a criminal record," Natural Field Experiments 00319, The Field Experiments Website.
  2. Grogger, Jeffrey, 1995. "The Effect of Arrests on the Employment and Earnings of Young Men," The Quarterly Journal of Economics, MIT Press, vol. 110(1), pages 51-71, February.
  3. Jeffrey R. Kling, 2006. "Incarceration Length, Employment, and Earnings," NBER Working Papers 12003, National Bureau of Economic Research, Inc.
  4. Lance Lochner, 2003. "Individual Perceptions of the Criminal Justice System," NBER Working Papers 9474, National Bureau of Economic Research, Inc.
  5. Rosa Cho & Robert LaLonde, 2005. "The Impact of Incarceration in State Prison on the Employment Prospects of Women," Working Papers 0510, Harris School of Public Policy Studies, University of Chicago.
  6. W. Kip Viscusi, 1986. "Market Incentives for Criminal Behavior," NBER Chapters, in: The Black Youth Employment Crisis, pages 301-351 National Bureau of Economic Research, Inc.
  7. Nagin, Daniel & Waldfogel, Joel, 1995. "The effects of criminality and conviction on the labor market status of young British offenders," International Review of Law and Economics, Elsevier, vol. 15(1), pages 109-126, January.
  8. Marianne Bertrand & Sendhil Mullainathan, 2004. "Are Emily and Greg More Employable Than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination," American Economic Review, American Economic Association, vol. 94(4), pages 991-1013, September.
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  10. Cho, Rosa & LaLonde, Robert J., 2005. "The Impact of Incarceration in State Prison on the Employment Prospects of Women," IZA Discussion Papers 1792, Institute for the Study of Labor (IZA).
  11. David H. Autor & David Scarborough, 2004. "Will Job Testing Harm Minority Workers?," NBER Working Papers 10763, National Bureau of Economic Research, Inc.
  12. Holzer, Harry J & Raphael, Steven & Stoll, Michael A, 2006. "Perceived Criminality, Criminal Background Checks, and the Racial Hiring Practices of Employers," Journal of Law and Economics, University of Chicago Press, vol. 49(2), pages 451-80, October.
  13. Hjalmarsson, Randi, 2008. "Criminal justice involvement and high school completion," Journal of Urban Economics, Elsevier, vol. 63(2), pages 613-630, March.
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Cited by:
  1. Wozniak, Abigail, 2012. "Discrimination and the Effects of Drug Testing on Black Employment," IZA Discussion Papers 6605, Institute for the Study of Labor (IZA).
  2. Dara N. Lee, 2011. "The Digital Scarlet Letter: The Effect of Online Criminal Records on Crime," Working Papers 1118, Department of Economics, University of Missouri.

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