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The Unintended Consequences of Employer Credit Check Bans for Labor Markets

Kristle Cortes, Andy Glover and Murat Tasci

No 201905, Working Papers from Federal Reserve Bank of Cleveland

Abstract: Over the last decade, 11 states have restricted employers? access to the credit reports of job applicants. We document a significant decline in county-level vacancies after these laws were enacted: Job postings fall by 5.5 percent in affected occupations relative to exempt occupations in the same county and the same occupation nationwide. Cross-sectional heterogeneity in the estimated effects suggests that employers use credit reports as signals: Vacancies fall more in counties with a large share of subprime residents, while they fall less in occupations with other commonly available signals.

Keywords: vacancies; credit score; credit check (search for similar items in EconPapers)
JEL-codes: J08 J23 J63 J78 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2019-02-25
New Economics Papers: this item is included in nep-lma
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DOI: 10.26509/frbc-wp-201905

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