Conviction, Partial Adverse Selection and Labour Market Discrimination
AbstractThis paper analyses data from the 6th sweep of National Child Development Study to investigate the labour market perspective of convicted individuals. Decomposition analysis makes it clear that convicted workers are actually discriminated against both in terms of employment and wage with respect to non-convicted. Adopting a simple theoretical model accounting for partial adverse selection problem in the hiring process, I show that discrimination is not only explained in terms of economic stigma but also may derive from the inefficiency of the police/justice system in detecting crime and punishing offenders. In fact, while firms may apply economic stigma to recover the expected extracosts from hiring convicted workers, firms rationality may impose to charge on convicted workers also unobservable expected extra-costs deriving from offenders non-convicted hired. The resulting over-stigma is increasing with the probability of offending and with the level of expected extra-costs, while it is decreasing with the probability of convicting offenders.
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Bibliographic InfoPaper provided by Department of Economics, University of Siena in its series Department of Economics University of Siena with number 594.
Date of creation: May 2010
Date of revision:
Other versions of this item:
- Sciulli Dario, 2010. "Conviction, Partial Adverse Selection and Labor Market Discrimination," Review of Law & Economics, De Gruyter, vol. 6(2), pages 275-302, December.
- 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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