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Who Benefits from Bans on Employer Credit Checks?


  • Leora Friedberg

    () (University of Virginia)

  • Richard M. Hynes

    () (University of Virginia School of Law)

  • Nathaniel Pattison

    () (Southern Methodist University)


Eleven states limit employers’ use of credit reports, and prominent politicians have proposed a national ban. This paper evaluates the success of these credit check bans in helping financially distressed individuals find employment. In the Survey of Income and Program Participation (SIPP), we identify those likely to directly benefit from credit check bans – unemployed individuals with recent financial trouble. Exploiting the staggered passage of state bans, we find that banning credit checks increases the likelihood of finding a job by twenty-five percent among people who have had trouble meeting their expenses. We find a small and statistically insignificant change in job-finding rates among people who have not had recent financial trouble and a statistically insignificant impact on minorities overall.

Suggested Citation

  • Leora Friedberg & Richard M. Hynes & Nathaniel Pattison, 2017. "Who Benefits from Bans on Employer Credit Checks?," Departmental Working Papers 1704, Southern Methodist University, Department of Economics.
  • Handle: RePEc:smu:ecowpa:1704

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    Cited by:

    1. Will Dobbie & Paul Goldsmith‐Pinkham & Neale Mahoney & Jae Song, 2020. "Bad Credit, No Problem? Credit and Labor Market Consequences of Bad Credit Reports," Journal of Finance, American Finance Association, vol. 75(5), pages 2377-2419, October.

    More about this item


    Credit Reports; Unemployment; Labor Market;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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