A new paper in The Quarterly review of economics, published by Oxford University Press, indicates that many American companies are ready to hire workers with criminal records. These companies become even more interested in hiring such workers if they are offered crime and safety insurance.
Employers are unlikely to interview or hire workers with criminal records over otherwise similar workers. In 2008, the unemployment rate among formerly incarcerated people (27%) was higher than the US unemployment rate for the general population at any time in history, including during the Great Depression.
In this paper, researchers used a field experiment to test several approaches to increasing demand for workers with criminal backgrounds that directly address the underlying reasons why employers may conduct criminal background checks. Researchers offered nearly 1,000 companies crime and security insurance to address risk issues, as well as screening based on past performance ratings and time since most recent criminal record. The researchers also provided objective information on the average performance of workers based on their background to address risk and productivity concerns. They compared these approaches to the effects of a wage subsidy, which essentially pays companies to hire people with criminal records, a very expensive way to increase demand for workers with criminal records, no matter how simple. .
The background of the study is a leading online job platform used by thousands of companies in the United States to employ workers for short-term jobs. Companies use the platform to connect with workers to fill a range of entry-level jobs in sectors such as general labour, hospitality and transport, as well as entry-level jobs in sectors in contact with customers or administrative staff who are traditionally more opposed to hiring. people with a criminal history. Companies using the platform do not decide to work with individual workers. The platform extends the job offer to workers who meet the minimum professional qualifications. Potential workers can then accept or reject these job offers on a first-come, first-served basis.
Researchers here found that 39% of companies using the platform are willing to hire people with criminal backgrounds to begin with. Some 45% of companies are willing to hire such employees for jobs that do not involve customer interactions. Researchers found that 51% of companies without high-value inventory were willing to hire employees with criminal histories. If employers are having difficulty filling positions, demand increases to 68%. Investigators found that demand increased by 10 percentage points when they offered employers the option of crime and safety insurance, a single performance review, or the ability to screen the most recent criminal records.
Limiting workers with criminal records to those who had previously held a job on the platform increased demand for their services by 11 percentage points, equivalent to the effect of a wage subsidy of 80%. Limiting workers to those who had not been arrested or convicted in the past year increased demand by 21 percentage points, equivalent to the effect of a 100% wage subsidy to employers. Researchers conclude that policies related to providing employers with crime and safety insurance and screening workers based on past performance and time since the most recent crime can significantly increase the demand for workers having a criminal record at a fraction of the cost of providing employees with a subsidies to hire these workers.
“With cost-effective policies, platforms can integrate workers who have been involved in the criminal justice system without deterring employers,” said the paper’s lead author, Zoë Cullen. “This is a promising approach to increasing labor supply and simultaneously addressing an urgent social challenge.”
The newspaper “Increasing demand for workers with criminal records” is available (at midnight on August 30e ) at: https://academic.oup.com/qje/article-lookup/doi/10.1093/qje/qjac029.
Zoe B. Cullen
Assistant Professor of Business Administration, Harvard Business School
Rock Center Rm. 211
Boston, MA 02163
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The Quarterly Journal of Economics
The title of the article
Increasing demand for workers with criminal records
Publication date of articles
August 30, 2022
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