Who Benefits from Bans on Employer Credit Checks?

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.