Perceived Criminality, Criminal Background Checks and the Racial Hiring Preferences of Employers

1. Perceived Criminality, Criminal Background Checks and the Racial Hiring Preferences of Employers Harry J. Holzer Georgetown University Steven Raphael UC Berkeley Michael A. Stoll UCLA

6. Collateral Consequences of Imprisonment Individual • Employment • Public Assistance, Voting, Public Housing, Driver’s Licenses, Adoptive and Foster Parenting, Student Loans Community • Neighborhoods, families, health, state budgets • Groups with High Incarceration Levels

7. Why Are Employers Adverse to Hiring Ex-Offenders? • Reluctant to hire ex-offenders • May steal or harm customers • Imperfect monitoring of employees-premium on trustworthiness • Certain occupations are legally closed to applicants with prior felony convictions • Protect against lawsuits • Legally liable for criminal actions of employees - theory of negligent hiring

10. Correlates of Employer Aversion to Ex-Offenders • Smaller establishments • Service and FIRE sectors (Manufacturing open to hiring) • Customer Contact • Use Informal Recruiting Methods • Unwilling to hire other “disadvantaged groups”

11. Potential Mechanisms to Act on Aversion • Use of Criminal Background Checks • Statistical discrimination

12. Do employers have access to criminal records? • Records of arrests, convictions, and time served are housed in state central repositories. • In general, states are more likely to give out information on conviction than arrest. • The U.S. DOJ recently concluded that criminal history record information is becoming more available to non-criminal justice users. • Several firms advertise on the internet, offering nationwide criminal background checks for as little as $15.

15. Use of Criminal Background Checks • larger firms • industries with more customer contact (retail trade, service and FIRE) • increasing over time • mostly from private sources

16. Effect of Checks on Black Hiring Ambiguous • Checking employers more likely to eliminate Black applicants since they are more likely to have criminal history records • Non-checking employers may infer likelihood of past conviction based on race (perceived criminality)

17. Description of the data Multi-City Study of Urban Inequality • Conducted between June 1992 and May 1994 in Atlanta, Boston, Detroit, and Los Angeles • Sample of firms generated from two sources: (1) a concurrent household survey, and (2) a sample of firms purchased from Survey Samples Incorporated (SSI). • SSI list was stratified by establishment size and sampled according to the distribution of employment across size categories. • Telephone surveys were conducted with the person at the firm in charge of hiring for firms that have hired into a position not requiring a college degree in the last three years. • The response rate for successfully screened firms was 67 percent.

20. Other Major Findings • Effects stronger for firms unwilling to hire ex-offenders and for smaller firms • Pattern not explained by application patterns • Similar effect for those with spotty work history

21. Conclusions • Employers who use checks more likely to hire black applicants than employers who do not. • Implies that adverse consequences of checks on those with criminal histories is more than offset by positive effects of eliminating statistical discrimination. • More true for firms unwilling to hire ex-offenders

22. What to Do to Raise Employment? • Supports for Reentry • Reverse Bans on Financial Aid and Public Assistance • Employment Bans Based on Content of Criminal History, Not Blanket Use • Conviction Not Arrest Records • Ensure Accuracy of Records • Incentivise Desistance-Expunge Certain Records After Fixed Time Period • Indemnify Employers – Bonds, Not in Blanket Fashion • Re-examine Federal, State and Local Employment/Licensing Restrictions • Child Support