The Unintended Consequences of Employer Credit Check Bans on Labor and Credit Markets

Kristle Cortes, Andy Glover and Murat Tasci

No 1625, Working Papers (Old Series) from Federal Reserve Bank of Cleveland

Abstract: Since the Great Recession, 11 states have restricted employers? access to the credit reports of job applicants. We document that county-level vacancies decline between 9.5 percent and 12.4 percent after states enact these laws. Vacancies decline significantly in affected occupations but remain constant in those that are exempt, and the decline is larger in counties with many subprime residents. Furthermore, subprime borrowers fall behind on more debt payments and reduce credit inquiries postban. The evidence suggests that, counter to their intent, employer credit check bans disrupt labor and credit markets, especially for subprime workers.

Keywords: unemployment rates; credit scores; credit check (search for similar items in EconPapers)
JEL-codes: J08 J23 J78 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2018-01-10
New Economics Papers: this item is included in nep-lab and nep-law
Note: Second revision. First published in November 2016 and revised in October 2017.
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: The Unintended Consequences of Employer Credit Check Bans on Labor and Credit Markets (2017)
Working Paper: The Unintended Consequences of Employer Credit Check Bans on Labor and Credit Markets (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcwp:1625

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DOI: 10.26509/frbc-wp-201625r2

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