Who Benefits from Bans on Employer Credit Checks?

Leora Friedberg, Richard Hynes () and Nathaniel Pattison
Additional contact information
Richard Hynes: University of Virginia School of Law

No 1704, Departmental Working Papers from Southern Methodist University, Department of Economics

Abstract: 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.

Keywords: Credit Reports; Unemployment; Labor Market (search for similar items in EconPapers)
JEL-codes: G28 J64 J70 K31 M50 (search for similar items in EconPapers)
Date: 2017-11
New Economics Papers: this item is included in nep-lab and nep-law
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:smu:ecowpa:1704

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