Skip navigation
The Habeas Citebook: Prosecutorial Misconduct - Header

Perceived Criminality, Criminal Background Checks, and the Racial Hiring Practices of Employers, Stoll, 2016

Download original document:
Brief thumbnail
This text is machine-read, and may contain errors. Check the original document to verify accuracy.
The Booth School of Business, University of Chicago
Perceived Criminality, Criminal Background Checks, and the Racial Hiring Practices of
Employers
Author(s): Harry J. Holzer, Steven Raphael and Michael A. Stoll
Source: The Journal of Law & Economics, Vol. 49, No. 2 (October 2006), pp. 451-480
Published by: The University of Chicago Press for The Booth School of Business,
University of Chicago and The University of Chicago Law School
Stable URL: http://www.jstor.org/stable/10.1086/501089
Accessed: 12-04-2016 19:05 UTC
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at
http://about.jstor.org/terms

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted
digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about
JSTOR, please contact support@jstor.org.

The Booth School of Business, University of Chicago, The University of Chicago Press,
The University of Chicago Law School are collaborating with JSTOR to digitize, preserve and extend
access to The Journal of Law & Economics

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

PERCEIVED CRIMINALITY, CRIMINAL
BACKGROUND CHECKS, AND THE RACIAL
HIRING PRACTICES OF EMPLOYERS*
HARRY J. HOLZER,
Georgetown Public
Policy Institute

STEVEN RAPHAEL,
University of
California, Berkeley
and

MICHAEL A. STOLL
University of California, Los Angeles

Abstract
In this paper, we analyze the effect of employer-initiated criminal background
checks on the likelihood that employers hire African Americans. We find that employers who check criminal backgrounds are more likely to hire African American
workers, especially men. This effect is stronger among those employers who report
an aversion to hiring those with criminal records than among those who do not. We
also find similar effects of employer aversion to ex-offenders and their tendency to
check backgrounds on their willingness to hire other stigmatized workers, such as
those with gaps in their employment history. These results suggest that, in the absence
of criminal background checks, some employers discriminate statistically against
black men and/or those with weak employment records. Such discrimination appears
to contribute substantially to observed employment and earnings gaps between white
and black young men.

I.

Introduction

A

t current incarceration rates, the Bureau of Justice Statistics (BJS) estimates that approximately 9 percent of all men will serve time in state or
federal prisons. These projections differ by race and ethnicity, with figures
of 28 percent for black males, 16 percent for Hispanic males, and 4 percent
for white males (Bonczar and Beck 1997).1 The BJS also estimates that the
median time served for recent prison releases is less than 2 years. In combination, these two facts suggest that at any point in time a large minority
of noninstitutionalized men have criminal history records. For certain sub* We thank the Russell Sage Foundation for their generous support of this project.
1
We report figures for men only since they constitute the majority of prison inmates (over
90 percent).
[Journal of Law and Economics, vol. XLIX (October 2006)]
᭧ 2006 by The University of Chicago. All rights reserved. 0022-2186/2006/4902-0017$01.50

451

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

452

the journal of law and economics

groups of the population, African Americans in particular, the proportion
with past criminal convictions is quite large.
The labor market prospects of ex-offenders are affected by whether employers have access to their criminal history records. Employers may be
reluctant to hire job applicants with criminal histories for fear that such
applicants may harm a customer or be more likely to steal. If employers can
and do review criminal history records, they may use these records to exclude
ex-offenders from consideration. Given the high proportion of blacks that
have served time, such exclusion should have particularly adverse consequences for African Americans.
Whether employers review criminal history records may also impact the
labor market prospects of individuals without criminal records. If accessibility
to criminal history information is limited (because of cost or legal prohibitions), employers may infer the likelihood of past criminal activity from such
traits as gender, race, or age. Such statistical discrimination would adversely
affect the employment outcomes of individuals with clean histories who
belong to demographic groups with high conviction rates. This negative effect
should also disproportionately impact African Americans, although the segment of the black population affected by such discrimination is distinct from
the segment excluded from opportunities because of criminal background
checks.
These arguments suggest that the net effect of criminal background checks
on the hiring of blacks is theoretically ambiguous. Employers who check
will be more likely to eliminate black applicants on the basis of revealed
information, while employers who do not may eliminate black applicants on
the basis of perceived criminality. Moreover, it is unclear which of these
effects should predominate. In this paper, we analyze the effect of employerinitiated criminal background checks on the hiring of African Americans.
Using establishment-level data, we assess whether the race of the most recently hired employee is impacted by whether the employer screens criminal
history records. We also assess whether the impact of criminal background
checks varies with the intensity of the employer’s aversion to workers with
criminal histories.
We find that employers that check criminal backgrounds are in general
more likely to hire African Americans. This holds for the likelihood of hiring
black men as well as black women, although this result is stronger for black
men. When we stratify the sample by employer self-reported willingness to
hire ex-offenders, we find a strong positive effect of criminal background
checks for employers that are averse to hiring ex-offenders. This effect is
larger and statistically distinguishable from the comparable effect for employers with no such aversion. This relative pattern holds for the hiring of
African Americans overall and for the hiring of black men, but not for the
hiring of black women. Finally, in an analysis of employer willingness to
hire other stigmatized groups of workers (such as workers with gaps in their

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

criminality and racial hiring practices

453

employment history), we find nearly identical relationships. Combined, these
results suggest that in the absence of background checks, employers use race,
gaps in employment history, and other perceived correlates of criminal activity to assess the likelihood of an applicant’s previous felony convictions
and factor such assessments into the hiring decision.
II.
A.

Criminal History Records and Black Hiring Outcomes
Employer Preferences and Access to Criminal Justice Information

There are several reasons why employers may screen the criminal history
records of potential employees. To start, certain occupations are closed to
individuals with a felony conviction under state and in some cases federal
law (Hahn 1991). In addition, in many states employers can be held liable
for the criminal actions of their employees (Bushway 1998).2 Finally, employers who need to fill positions where employee monitoring is imperfect
may place a premium on trustworthiness and may have little confidence in
ex-offenders.3
There is strong evidence of employer aversion to applicants with criminal
history records in the establishment data that we analyze. Figure 1 presents
the distribution of employer responses to a question inquiring about the
likelihood that the employer would be willing to accept an applicant with a
criminal record.4 Over 60 percent of employers indicate an aversion to hiring
ex-offenders. Moreover, Figure 2 reveals that this aversion is stronger on
average than employer aversion to hiring other groups of commonly stigmatized workers, such as welfare recipients, applicants with a general equivalency diploma (GED), or applicants with gaps in their employment histories.
Employers exhibit the most aversion to hiring applicants with spotty work
histories (a characteristic that one might interpret as indirectly signaling past
incarceration). Even for this group, however, the proportion willing to consider such applicants exceeds the proportion willing to consider ex-offenders.
2
Scott (1987) cites several examples in which employers were held responsible for the
criminal acts of their employees under the theory of negligent hiring, including judgments
against the owner of a taxi company and a security services firm for sexual assaults committed
by employees. In one cited instance involving a sexual assault committed by an apartment
manager, the owner of an apartment complex was found negligent for not taking into account
gaps in the manager’s work history in the hiring decision.
3
Whether the employer can legally consider such information in making hiring decisions
is another matter. The Equal Employment Opportunities Commission guidelines prohibit “blanket exclusions” of applicants with criminal records. However, employers can consider criminal
histories so long as the severity of the offense is related to the applicant’s ability to effectively
perform the job and so long as the employer considers the time lapsed since offending in
coming to a decision (see Bushway 1998).
4
The data were collected in the early 1990s and cover establishments in the Atlanta, Boston,
Detroit, and Los Angeles metropolitan areas that hire workers without college degrees. The
data source and sampling frame will be discussed in detail below.

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

454

the journal of law and economics

Figure 1.—Self-reported employer willingness to hire applicants with criminal records

Whether and how employers screen out ex-offenders depends on employers’ access to criminal history record information. Criminal history records
are obtained by querying central state repositories maintained by each state
and the District of Columbia. State law enforcement agencies are required
to report arrest and disposition information to the repository for all serious
offenses. In a recent policy review, the U.S. Department of Justice (1999)
concludes that criminal history records are increasingly becoming more available to noncriminal justice users. Currently, 23 states have some form of
public access or freedom-of-information statutes pertaining to criminal history record information.5
In our data, a sizable fraction of employers use criminal background checks
to screen potential employees, as Figure 3 demonstrates. Roughly half of
employers either always or sometimes check the criminal history records of
applicants. Moreover, for the one city for which we have data for two points
in time (Los Angeles), employer use of such checks appears to have increased
(see Figure 4). Hence, the noted trend toward greater accessibility to criminal
history records is evident among employers in the Los Angeles metropolitan
area.

5
Nearly all states make a distinction between arrest records and conviction records. States
are generally less likely to disseminate information on arrests and place fewer restrictions on
non-criminal-justice access to conviction records.

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

criminality and racial hiring practices

455

Figure 2.—Self-reported employer willingness to hire applicants from various disadvantaged (low-skilled) groups.

B.

The Availability of Criminal History Records and
Employer Hiring Decisions

The effect of background checks on black employment outcomes depends
on how employers make use of such information. Employers may view the
potentially lower productivity of ex-offenders as a payroll tax that reduces
marginal product. Such employers may offer ex-offenders employment, but
at reduced wages. Alternatively, employers may perceive the downside of
employing ex-offenders as so large that marginal wage reductions would not
constitute sufficient compensation. Such employers will avoid hiring exoffenders all together. Given the aversion to ex-offenders documented above,
such a quantity response is the more likely margin of adjustment. On the
basis of this reasoning, this paper focuses on the hiring decision.
To illustrate the theoretically ambiguous effect of criminal background

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

456

the journal of law and economics

Figure 3.—Frequency with which employers check criminal backgrounds

checks on the likelihood of hiring an African American applicant, we employ
a simplified version of the statistical discrimination model presented by Altonji and Pierret (2001). Let vi be the productivity of a job applicant i, which
is determined by the equation
vi p b 0 ϩ b1 Si ϩ b 2 Ci ϩ b 3 Bi ϩ hi ,

(1)

where Si is educational attainment, Ci is a measure of criminality, Bi is an
indicator variable for black, hi is a mean-zero random error term, and b0
through b3 are parameters. Assume that employers hire applicants with positive productivity (that is, vi 1 0) and that criminality negatively affects productivity (b 2 ! 0). Criminality is determined by the equation
Ci p a 0 ϩ a1 Si ϩ a 2 Bi ϩ ␧i ,

(2)

where a0 through a2 are parameters, ␧i is a mean-zero random disturbance,
and all other variables are as defined. The parameter a2 provides the mean
difference in criminality between blacks and nonblacks that is assumed to
be positive.
We begin with the case in which employers have full access to criminal
history records. The difference between the probabilities of hiring a nonblack
and a black applicant chosen at random will be an increasing function of the
average productivity difference between the two groups. This follows from

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

criminality and racial hiring practices

457

Figure 4.—Frequency with which employers check criminal backgrounds in Los Angeles,
1993–94 and 2001.

the employer’s hiring rule. The difference in the expected value of productivity is given by
E(vFS,
B p 0) Ϫ E(vFS,
B p 1)
i
i
p Ϫb 3 ϩ b 2[E(CFS, B p 0) Ϫ E(CFS, B p 1)].

(3)

After substituting the racial difference in criminality for the last term on the
right, the difference in expected productivity can be rewritten as
E(vFS,
B p 0) Ϫ E(vFS,
B p 1) p Ϫb 3 Ϫ b 2 a 2 .
i
i

(4)

The portion of this mean productivity difference associated with differential
criminality lowers the relative likelihood that the firm hires black workers.
Note, in this instance, that employers observe the true value of Ci, a fact
that on average harms black employment prospects.
Now suppose that employers cannot review criminal history records. One
possibility is that employers ignore equation (2) and make hiring decisions
that are based only on the direct effects of schooling and race on productivity.

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

458

the journal of law and economics

This would involve ignoring the relationship between race and criminality
and would eliminate the expected difference in productivity between black
and nonblack job applicants operating through this factor. If this were an
accurate description of employer behavior, then limiting access to criminal
history records would unambiguously increase the relative hiring rates of
African American applicants.
An alternative possibility is that employers formulate expectations concerning the relationship between race and criminality and take these expectations into account. One manner of modeling the process by which employers
“estimate” the criminality of job applicants is to assume that employers know
the parameters of the criminality equation (2). Such an estimate might be
considered rational in the sense that employers do not systematically underestimate the criminality of minorities (as in the previous example) or
overestimate the relationship (as discussed below). Under these assumption,
employers estimate criminality on the basis of schooling and race according
to the equation
E(CFS, B) p a 0 ϩ a1 Si ϩ a 2 Bi .

(5)

Substituting this conditional expectation into equation (1), an employer’s
estimate of a given applicant’s productivity in the absence of perfect information is given by
E(vFS, B) p b 0 ϩ b 2 a 0 ϩ (b1 ϩ b 2 a1 )Si ϩ (b 3 ϩ b 2 a 2 )Bi .

(6)

Since the employer cannot observe criminality in this scenario, the employer
places extra weight on the correlates of criminality (race and schooling, in
this example) in formulating expectations about the likely productivity of
the job applicant.
In this instance, the difference between the likelihood of hiring a nonblack
applicant and the likelihood of hiring a black applicant will again be an
increasing function of the difference in the expected productivity between
the two groups, or
E(vFS,
B p 0) Ϫ E(vFS,
B p 1) p Ϫb 3 Ϫ b 2 a 2 ,
i
i

(7)

which is equivalent to the expected productivity differential when criminal
history records are perfectly accessible. Hence, if employers accurately estimate the relationship between race and criminality, increasing access to
criminal history records will not affect the relative hiring rates of blacks.6
Of course, this result depends critically on the assumption that employers
accurately estimate the relationship between criminality and race. If employers systematically overestimate the racial difference in criminality, then
6
Of course, the composition of the pools of who is hired and who is not will change.
Statistical discrimination will clearly harm some applicants with positive productivity while
benefiting others with negative productivity.

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

criminality and racial hiring practices

459

the expected productivity difference in equation (7) will be larger than the
actual difference. Here, increasing employer access to criminal history records would actually increase the likelihood that employers hire black
applicants.
Statistical discrimination models commonly assume that the pursuit of
profits will eventually align expectations and reality (Aigner and Cain 1977;
Lundberg and Startz 1983). Employers who consistently under- or overestimate the relationship between a signal and an unobservable factor that
affects productivity will suffer as a consequence. In the example analyzed
here, however, the underlying relationship that employers would need to
assess has changed considerably over the past 2 decades. Moreover, the sharp
increase in prison incarceration rates among young black males may easily
lead to a period of overestimated criminality that only time and experience
will undo.7 Regardless, the model illustrates how the net effect of increasing
or restricting access to criminal history records on the hiring rates of African
Americans is an empirical issue.
While there is little research on the effects of criminal background checks
on minority hiring, several studies address related questions. Bushway (1998,
2004) hypothesizes that restricted access to state repositories is likely to
lower the relative wages of blacks because of statistical discrimination. In
earlier work, Bushway (1998) assesses whether the black/white wage ratio
is lower in states where the criminal history record systems are automated,
where automation serves as a proxy for greater accessibility. In the later
work, Bushway (2004) estimates the effect on the black/white wage ratio of
the degree of openness of state repositories to non-criminal-justice users.
Both studies yield evidence that the black/white wage ratio is higher in states
with lower barriers to access, although the results are not always significant.
Autor and Scarborough (2004) find that formal screening devices do not
reduce the hiring of blacks, despite the relatively poor performance of black
applicants on standardized assessments. While that study does not address
criminal background checks, the results parallel the argument made here.
The authors analyze hiring outcomes at a large national retail chain that
introduced formal test-based applicant assessment procedures. The relatively
low black test scores coupled with the strong effect of scores on the likelihood
of being hired yield the prediction that introducing the formal screening would
reduce black hiring rates by nearly 20 percent. However, the authors find no
such reduction, suggesting that the subjective assessments of black applicants
by interviewers prior to testing negatively impacted black hiring rates.
Finally, a recent audit study by Pager (2003) provides further evidence
7
Moreover, it is not particularly clear that time and experience will undo employer misperceptions. In fact, the response of black job applicants to such misperceptions could potentially create a negative feedback loop whereby erroneous employer beliefs are eventually
correct. For a thorough discussion of such processes, see Loury (2002).

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

the journal of law and economics

460

consistent with our model. Pager conducted an audit study in Milwaukee
whereby pairs of auditors of the same race were sent to apply for the same
jobs, one with a spell in prison listed on his resume and one with no such
signal. Among the white auditors, 34 percent of the nonoffenders received
a callback in contrast to 17 percent of ex-offenders. The comparable figures
for blacks were 14 and 5 percent. Consequently, Pager draws two conclusions.
First, the ex-offender stigma effect is larger for blacks (given the 65 percent
reduction in the callback rates for black ex-offenders relative to the 50 percent
reduction for whites).8 Second, animus-based racial discrimination against
blacks is more important in explaining the inferior employment outcomes of
black men (given the finding that black nonoffenders receive fewer callbacks
than white ex-offenders).
Our theoretical argument provides an alternative interpretation of the low
callback rate for black nonoffenders. In Pager’s study, the auditor marked
as an ex-offender explicitly signals having been in prison by including inprison work experience on his resume. The nonoffending auditor does not
reveal a criminal past. If employers believe that all young black men have
served time, the low callback rate for black nonoffenders may reflect statistical discrimination.9 Moreover, as noted by Bushway (2004), the audited
sample of job openings explicitly excludes job openings for which a background check is likely (for example, jobs that are legally closed to exoffenders and job advertisements with explicit mentions of background
checks). Moreover, the majority of employers audited care enough about the
criminal backgrounds of the applicants to inquire about it on their application
forms. As our empirical work below will demonstrate, employers that are
averse to hiring ex-offenders and that do not check are the most likely to
engage in statistical discrimination.
III.

Empirical Strategy and Description of the Data

The theoretical discussion indicates that the impact of employer access to
criminal history records on black hiring rates depends on the extent to which
employers statistically discriminate in the absence of such information. Moreover, the accuracy with which employers estimate the relationship between
race and criminality will impact the net effect of criminal background checks.
Since this net effect is theoretically ambiguous, this question is inherently
8
However, the percentage point decline in the callback rate for white offenders (17 points)
exceeds the percentage point decline for black offenders (9 points).
9
One possible test of this hypothesis would be to assess whether there is an order effect on
the likelihood that the black nonoffender auditor received a callback. Specifically, in instances
when the ex-offender applies first, the appearance of the prison information on the auditor’s
resume may prime a cognitive association between race and crime in the mind of the employer.
To the extent that this triggers the subjective assessment of the employer, one should observe
a lower callback rate for the nonoffender black auditor in audits when he is the second to
apply.

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

criminality and racial hiring practices

461

empirical. In this section, we outline a strategy for assessing the consequences
of employer-initiated criminal background checks on firm hiring outcomes.
We estimate the effect of criminal background checks on the likelihood
that an employer’s most recent hire is African American. Using a sample of
establishments, we estimate a series of linear probability models in which
the dependent variable is a dummy variable that indicates that the most recent
hire is black and the key explanatory variable is an indicator variable set to
one if the employer uses criminal background checks in screening applicants
for the recently filled position.
The principal identification problem encountered concerns the possibility
that use of criminal background checks is likely to reflect the characteristics
of a firm’s applicant pool. For example, employers that face a disproportionately black applicant pool and that wish to screen out ex-offenders will
be both more likely to check criminal backgrounds as well as more likely
to hire African Americans. We address this identification problem with a
two-pronged strategy. First, we attempt to include extensive control for factors
that are likely to influence the composition of the applicant pool. Second,
we test for a differential effect of checking criminal backgrounds by the
degree of self-reported employer aversion to hiring ex-offenders. Finally, we
test for an effect of background checks on employer willingness to hire other
stigmatized job applicants.
There is considerable evidence suggesting that certain employers draw
quite heavily on minority labor supplies. For example, there is ample evidence
that demonstrates that black-owned businesses and establishments with African American management are considerably more likely to hire black workers (Bates 1993; Turner 1997; Carrington and Troske 1998; Raphael, Stoll,
and Holzer 2000). Moreover, several studies show that urban space racially
segregates racial employment and search distributions.10 Hence, one might
contend that variation in whether employers check criminal history records
would occur along such dimensions. Omitting the composition of the applicant pool from the analysis would thus create a spurious positive correlation between employer use of criminal background checks and the likelihood of hiring black workers.
Our first strategy for addressing this identification problem is to control
extensively for characteristics of the establishment that are likely to impact
the racial composition of the firm’s labor supply. Specifically, in our models
of firm hiring outcomes we include extensive controls for the firm’s spatial
proximity to black and white residential communities. In addition, we control
directly for employer self-reports concerning the proportion of the applicant
10
Holzer (1996), Ihlanfeldt and Young (1996), and Raphael, Stoll, and Holzer (2000) all
show large geographic differences in the likelihood that employers hire African Americans.
Stoll and Raphael (2000) show that black and white workers search for jobs in different areas
of the metropolitan area, with much of the difference explained by racial housing segregation.

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

462

the journal of law and economics

Figure 5.—Frequency of criminal history record checks by employer willingness to hire
applicants with criminal records

pool that is black. Finally, we make use of the extensive information on
employer skill needs and screening methods collected in the survey to adjust
the estimates for interestablishment variation in the demands placed on new
employees.
Our second strategy exploits the imperfect association between whether
employers check criminal backgrounds and the employers’ self-reported aversion to hiring workers with criminal histories. Figure 5 graphically presents
employers’ reported use of criminal background checks by employer willingness to hire applicants with criminal records. There is a strong association
between unwillingness to hire and the use of criminal background checks,
although this correlation is far from perfect.
Variation in the use of this screening device within these subsamples
permits a more precise assessment of the likely impacts of increasing employer access to criminal history records. One might hypothesize that employers with a strong stated aversion to hiring applicants with criminal history
records are more likely to statistically discriminate in the absence of a formal

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

criminality and racial hiring practices

463

criminal background check. Moreover, if there is a systematic tendency of
employers to overestimate the strength of the relationship between race and
criminality, one might expect that employers least willing to hire ex-offenders
(perhaps the employers with the most to lose if they make a false-negative
inference) will be the most likely to commit such an error. These arguments
suggest that the net effect of employer-initiated background checks will be
heterogeneous, with more positive effects for those employers least willing
to hire ex-offenders. In other words, there should be a positive interaction
effect between criminal background checks and employer unwillingness to
hire.11
We employ this strategy in an attempt to detect statistical discrimination
aimed at weeding out applicants with criminal records. We first stratify the
sample into two groups defined by employer unwillingness to hire exoffenders. Next we calculate within-group difference in the likelihood of
hiring black applicants between employers who check and employers who
do not. We then test whether the effect of background checks is larger for
the least willing employers by calculating the relevant difference in difference
and testing its significance. We present difference-in-difference estimates that
are both unadjusted and regression adjusted for observable variables.
We use an establishment survey collected through the Multi-city Study of
Urban Inequality (Holzer et al. 2000). The survey includes slightly over
3,000 establishments and was conducted between June 1992 and May 1994
in the Atlanta, Boston, Detroit, and Los Angeles metropolitan areas. The
sample of firms is drawn from two sources: from the employers of the
respondents to a household survey conducted in conjunction with the survey
of establishments that provided approximately 30 percent of the observations
and from a sample of establishments generated by Survey Sampling Incorporated (SSI). The SSI sample is a random-stratified sample in which the
initial lists are stratified by establishment size and firms are sampled according
to the proportion of metropolitan area employment accounted for by their
size categories. Hence, the SSI sample is representative of the set of establishments faced by a job seeker in any of the four metropolitan areas. We
use sample weights in all calculations and model estimations to account for
the nonrepresentative portion of the sample from the household survey. Establishments were screened according to whether they had hired an employee
into a position not requiring a college degree within the previous year. The
11
This idea is conceptually similar to the estimation strategy employed by Holzer and
Ihlanfeldt (1998) in their assessment of the importance of customer discrimination in determining the race of recent hires. The authors reason that the effect of customer discrimination
on the likelihood that blacks are hired should matter most for positions involving direct customer
contact. On the basis of this proposition, they test for an interaction effect between a dummy
indicating a customer contact job and the racial composition of the establishment’s customers
in regression models where the dependent variable is a dummy indicating that the most recent
hire is black.

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

464

the journal of law and economics
TABLE 1
Conditional Averages of Hiring Outcomes

All Firms
Last worker hired is
black:
All firms
Checks
Does not check
D(Checks Ϫ
does not check)
Proportion of applicants
who are black:
All firms
Checks
Does not check
D(Checks Ϫ
does not check)

.199
.244
.159

Willing to Hire Not Willing to Hire

(.008)
(.012)
(.010)

.193
.223
.175

(.013)
(.021)
(.016)

.203
.254
.148

(.010)
(.015)
(.013)

.010 (.017)
.031 (.026)
Ϫ.027 (.021)
.058ϩ (.033)

.084** (.016)

.048ϩ (.026)

.107** (.021)

.300
.370
.242

.295
.369
.250

.304
.370
.236

(.008)
(.012)
(.010)

.128** (.016)

(.014)
(.023)
(.017)

.120** (.028)

D (Not Willing
Ϫ Willing)

(.011)
(.016)
(.014)

.008 (.017)
.001 (.028)
Ϫ.014 (.021)

.134** (.021)

.015 (.034)

Note.—Standard errors are in parentheses. Firms that always check or sometimes check criminal
backgrounds are coded as checking. Firms that state that they “definitely will” or “probably will” hire
a worker with a criminal background are coded as willing to hire, while firms stating “probably not”
or “absolutely not” are coded as unwilling to hire.
ϩ
Difference significant at the 10% level of confidence.
** Difference significant at the 1% level of confidence.

response rate for firms that passed the initial screen is 67 percent. This
compares favorably with other establishment surveys (Kling 1995).12
Telephone surveys were conducted with individuals in charge of hiring at
the firm. Our chief dependent variable is the race of the most recent hire
into a position not requiring a college degree. The survey includes two
questions vital to the current analysis: a question on employer preferences
with respect to workers with criminal histories and a question on whether
employers use criminal background checks.13 These three variables provide
our key dependent and explanatory variables for the analysis below.
IV.

Empirical Results

Table 1 presents average values for a dummy variable indicating that the
last worker hired is black and for the proportion of applicants to the establishment that are African Americans. There is no overall difference in the
likelihood of hiring a black worker between unwilling and willing employers.
There is a large significant difference, however, between employers that do
12
Holzer (1996) provides detailed comparisons of response rates by industry, location, and
establishment size and finds no substantial differences in response rates.
13
For criminal background checks, the question reads, “For the last position hired into, how
often do you check the applicant’s criminal records? always, sometimes, or never?” The
question on employer preferences reads, “Would you accept for this position an applicant who
had a criminal record? definitely will, probably will, probably not, absolutely not?”

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

criminality and racial hiring practices

465

background checks and employers that do not. Employers that check are 8.4
percentage points more likely to have hired an African American applicant
into the most recently filled position. Among employers willing to hire exoffenders, this difference is 4.8 percentage points and is marginally significant. Among employers who are unwilling to hire ex-offenders, this difference is 10.7 percentage points and is highly significant. Moreover, the
difference between these two differences (5.8 percentage points) is significant
at the 8 percent level.
The patterns for proportions of black applicants, however, indicate that
these findings may be driven by differences in the application rates of blacks
across establishments. The percent of applicants who are African American
at firms that check is nearly 13 percentage points greater than the comparable
percent at establishments that do not. While this may reflect a response on
the part of black applicants (black applicants apply where they are most
likely to be hired), the strong association between the racial composition of
the applicant pool and checking qualifies the interpretation of the patterns
for the race of the last worker hired. However, we do not find the same
relative patterns when the sample is stratified by willingness to hire. While
the point estimate for unwilling firms is slightly higher, the relative difference
is small and only half the size of its standard error.
One might suspect that background checks should be more likely to impact
the hiring outcomes of black men than those of black women. While black
women are incarcerated at a relatively high rate, the population of incarcerated
African Americans is overwhelmingly male (over 90 percent). To explore
potential gender differences, Table 2 reproduces the conditional averages
presented in Table 1 using gender-specific outcome variables.
Relative to unwilling employers, willing employers are more likely to have
recently hired a black male (2.1 percentage point difference, significant at
the 10 percent level), as are employers that check relative to those that do
not (3.6 percentage points, significant at the 1 percent level). When establishments are stratified by preferences, we see a large, significant, and positive
impact of checking on the hiring of black males (5.6 percentage points,
significant at the 1 percent level) among unwilling employers and a negligible
and insignificant effect of checking among willing employers. Consequently,
the relative impact of checking criminal backgrounds for unwilling firms
relative to willing firms (the difference-in-difference estimate) is positive (4.4
percentage points) and significant at the 10 percent level.
The results for the black female hiring outcome yield some interesting
differences. While we still observe an overall positive and significant difference between employers that check and employers that do not (4.8 percentage points), unwilling employers are more likely to have recently hired
a black woman than willing employers (3 percentage point difference, significant at the 5 percent level). This contrasts with an overall negative effect
of employer aversion on the likelihood of hiring a black man. Stratifying the

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

466

the journal of law and economics
TABLE 2
Racial and Gender Composition of the Last Worker Hired

All Firms
Last worker hired is a
black male:
All firms
Checks
Does not check
D(Checks Ϫ does not
check)
Last worker hired is a
black female:
All firms
Checks
Does not check
D(Checks Ϫ
does not check)

Willing to Hire Not Willing to Hire

D (Not Willing
Ϫ Willing)

(.006)
(.009)
(.007)

.110 (.010)
.118 (.016)
.107 (.013)

.089
.116
.061

(.007)
(.011)
(.009)

Ϫ.021ϩ (.012)
Ϫ.001 (.019)
Ϫ.045** (.016)

.036** (.012)

.011 (.021)

.056** (.015)

.044ϩ (.024)

.102
.127
.078

(.006)
(.010)
(.008)

.083 (.009)
.106 (.015)
.069 (.011)

.114
.137
.087

.030* (.013)
.031 (.020)
.018 (.015)

.048** (.012)

.037* (.018)

.050** (.016)

.097
.117
.080

(.008)
(.012)
(.011)

.013

(.025)

Note.—Standard errors are in parentheses. Firms that always check or sometimes check criminal
backgrounds are coded as checking. Firms that state that they “definitely will” or “probably will” hire a
worker with a criminal background are coded as willing to hire, while firms stating “probably not” or
“absolutely not” are coded as unwilling to hire.
ϩ
Difference significant at the 10% level of confidence.
* Difference significant at the 5% level of confidence.
** Difference significant at the 1% level of confidence.

sample by willingness to hire ex-offenders, the checking/nonchecking differentials are comparable for willing employers (3.7 percentage points) and
unwilling employers (5 percentage points), with an insignificant differencein-difference result.
To be sure, the patterns observed in Tables 1 and 2 may be driven by
factors correlated with checking criminal backgrounds, employer aversion to
ex-offenders, and the interaction between the two. Fortunately, we are able
to observe several establishment characteristics. Tables A1 and A2 present
means of observable variables for the sample stratified by employer aversion
to hiring ex-offenders (Table A1) and by employer use of criminal background
checks in screening applicants (Table A2). These tables do indeed reveal
several noticeable differences across establishments. For example, smaller,
nonmanufacturing firms whose employees interact with customers are the
most averse to hiring ex-offenders. In addition, averse employers are less
likely to use informal recruiting techniques (walk-ins, for example) and are
less likely to hire workers with gaps in their employment history. Table A2
reveals that small employers are least likely to use criminal backgrounds
checks, as are employers in the manufacturing sector. Moreover, employers
that check criminal backgrounds are more likely to use informal recruiting
methods (accepting walk-ins and posting help-wanted signs), are more likely
to accept referrals from state and community agencies, and are more likely
to use affirmative action in recruiting.

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

criminality and racial hiring practices

467

To probe the robustness of the results in Tables 1 and 2, Table 3 presents
regression-adjusted estimates of the impact of criminal background checks
after adjusting for the observable variables listed in the Appendix tables. The
table presents the results from two underlying empirical models. The first
regresses a dummy variable indicating that the most recent hire is black on
the dummy indicating that the employer checks criminal backgrounds. The
second adds whether the employer indicates an unwillingness to hire exoffenders and an interaction term between unwillingness to hire and background checking. Concerning the remaining covariates, the table presents
results from four specifications. Specification (1) omits all other controls and
thus corresponds to the differences in means presented in Table 1. Specification (2) add three metropolitan area dummies, a variable measuring the
physical distance of the establishment’s location from blacks14 and whites,
and six interaction terms between the three metropolitan area dummies and
the two distance dummies. Specification (3) adds the proportion of applications who are African Americans. Finally, specification (4) adds all of the
other covariates in Tables A1 and A2.15
We begin with the results omitting the interaction term between background
checks and employer preferences. Adding the distance, metropolitan area,
and unwilling-to-hire variables causes a decline in the coefficient on criminal
background checks from .085 to .043. Nonetheless, the effect is statistically
significant at the 1 percent level. Adding the proportion of applications from
blacks causes a slight decline in the point estimate to .039 (significant at the
3 percent level of confidence). Adding all of the other control variables in
regression 4 eliminates the effect of background checks on the likelihood
that the most recently hired employee is black. Sensitivity analysis revealed
that the variables that are particularly important in knocking out the effect
include the dummies for firm size and industry and the variables indicating
the types of employees that the employer will not consider.
Turning to the results including the interaction term, the effect of criminal
background checks for willing employers is given by the coefficient on the
criminal background checks variable. The effect for unwilling employers is
given by the sum of the coefficients on the background checks variable and
the interaction term. Thus, the interaction term coefficient measures the dif14
The average distance from blacks is calculated using linear distances (in miles) between
the centroid of the employer’s census tract and the centroids of all other census tracts in the
area. The variable for each employer is the weighted average of distance to all other census
tracts where the weights are the black population counts in the destination tract. See Holzer
and Ihlanfeldt (1996) and Raphael, Stoll, and Holzer (2000) for a more detailed discussion of
these indexes.
15
The sample size changes across regression specifications because several of the observations have missing values for one or more of the added explanatory variables. We also
estimated separate models constraining the sample to observations with complete information
on all explanatory variables. These results are qualitatively similar to those presented here.

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

TABLE 3
Linear Regressions Models of the Likelihood That the Most Recent Hire Is Black
Specification 1
(N p 2,441)

Checks criminal backgrounds

Specification 3
(N p 1,505)

Specification 4
(N p 1,210)

(1)

(2)

(1)

(2)

(1)

(2)

(1)

(2)

.085
(.016)

.048
(.026)
Ϫ.027
(.022)
.058
(.033)
No
No
No
.012

.043
(.016)
Ϫ.001
(.016)

.008
(.027)
Ϫ.027
(.023)
.057
(.033)
Yes
No
No
.125

.039
(.018)
Ϫ.008
(.018)

.005
(.030)
Ϫ.037
(.025)
.052
(.037)
Yes
Yes
No
.313

Ϫ.015
(.022)
Ϫ.008
(.021)

Ϫ.059
(.033)
Ϫ.041
(.028)
.074
(.041)
Yes
Yes
Yes
.367

Unwilling to hire ex-offenders
. . .
Checks # unwilling
Spatial proximity to blacksa
Percent of black applicants
Other covariatesb
R2

Specification 2
(N p 2,212)

. . .
No
No
No
.011

. . .
Yes
No
No
.124

. . .
Yes
Yes
No
.312

. . .
Yes
Yes
Yes
.367

Note.—All regression include a constant. Standard errors are in parentheses.
a
These controls include a measure of the establishment’s average distance to white neighborhoods, average distance to black neighborhoods, four metropolitan area
dummies, and a complete set of interaction terms between the metropolitan area dummies and the distance variables.
b
These controls include all of the covariates in Tables A1 and A2.

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

criminality and racial hiring practices

469

ference in the effect of checking between employers that are unwilling and
employers that are willing.
The results omitting all other controls (specification [1]) reproduce the
patterns observed in Table 1. There are significant effects of checking criminal
backgrounds on black hiring for both willing and unwilling employers. The
larger effect for unwilling employers is statistically distinguishable from the
effect for willing employers. Adding the distance variables and the metropolitan area dummies eliminates the base effect of criminal background
checks for willing employers and reduces the effect for unwilling employers.
The relative difference, however, is unaffected and remains significant at the
10 percent level of confidence. Directly controlling for the applicant pool
racial composition does not affect the base coefficient on the background
checks dummy and slightly diminishes the coefficient on the interaction term
(which is now statistically insignificant, with a p-value of .166). Finally,
adding all covariates causes a large decline in the base effect of background
checks (the coefficient is Ϫ.059, with a p-value of .076) and slightly increases
the coefficient on the interaction term (which is again significant at the 7
percent level of confidence). The results in the final regression indicate that
among willing firms, employer access to criminal history records decreases
the likelihood of hiring African Americans. On the other hand, among unwilling employers, performing background checks leads to a slight increase
in the likelihood of hiring African Americans.
Table 4 presents comparable results for the gender-specific hiring outcomes
analyzed in Table 2. The model specifications parallel those used in Table
3. For each specification and each outcome, we present the results from two
regressions: a regression excluding the interaction term between checking
and employer unwillingness to hire ex-offenders and a regression including
the interaction term.
Beginning with results for males, the models omitting the interaction term
indicate a positive overall effect of checking criminal backgrounds on the
hiring of black males. These effects are marginally significant in specifications
(1)–(3) and insignificant in specification (4). Moreover, in all of the models
excluding the interaction terms, employer aversion to hiring exoffenders has a negative and significant effect on the likelihood of hiring
black males. In the models including the interaction term, the point estimate
consistently indicates that checking has a larger effect on the likelihood of
hiring black men for unwilling firms relative to willing firms. This effect,
however, is significant in the first two specifications only.
The results for black women parallel the unadjusted results presented in
Table 2. In the specifications omitting the interaction term, the checking
dummy variable is significant in the first two specifications and insignificant
in specifications (3) and (4). When included, employer unwillingness to hire
ex-offenders exerts a positive significant effect on the outcome in all speci-

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

TABLE 4
Impact of Criminal Background Checks on the Likelihood That the Most Recent Hire Is Black
Specification 1

Specification 2

Specification 3

Specification 4

(1)

(1)

(1)

(1)

(2)

(2)

(2)

(2)

Last worker hired is a black male:
Checks criminal backgrounds
.036 (.012)
.011 (.020)
.022 (.013) Ϫ.003 (.020)
.025 (.015)
.004 (.025)
.004 (.019) Ϫ.021 (.028)
Unwilling to hire ex-offenders
. . .
Ϫ.046 (.016) Ϫ.026 (.013) Ϫ.045 (.018) Ϫ.050 (.015) Ϫ.065 (.021) Ϫ.042 (.018) Ϫ.061 (.024)
Checks # unwilling
. . .
.044 (.024)
. . .
.041 (.025)
. . .
.034 (.031)
. . .
.042 (.035)
Last worker hired is a black female:
Checks criminal backgrounds
.048 (.012)
.037 (.020)
.021 (.013)
.011 (.021)
.014 (.015)
.001 (.025) Ϫ.019 (.019) Ϫ.038 (.027)
Unwilling to hire ex-offenders
. . .
.018 (.017)
.025 (.013)
.018 (.018)
.036 (.016)
.027 (.021)
.034 (.018)
.020 (.023)
Checks # unwilling
. . .
.013 (.025)
. . .
.015 (.026)
. . .
.019 (.031)
. . .
.031 (.034)
Note.—Values are unadjusted and regression-adjusted first-difference and difference-in-differences estimates. Standard errors are in parentheses. The remainder of
the model specifications (the results of which are not reported in the table) correspond to the model specifications used in Table 3.

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

criminality and racial hiring practices

471

fications. In the difference-in-difference models, the coefficient on the interaction term is small and statistically insignificant in all specifications.
V.

Effects on Other Groups of Commonly
Stigmatized Applicants

The results in the previous section are consistent with the proposition that
in the absence of a criminal background check, employers use race to infer
past criminal activity, especially employers with a strong stated aversion to
hiring ex-offenders. The results also suggest that the impact of such statistical
discrimination on the likelihood that the most recently hired employee is
black is of sufficient magnitude to swamp any negative effect of a criminal
background check on black hiring rates. While in our theoretical and empirical discussion presented above we have couched the discussion of statistical discrimination in terms of employers making use of the physical
markers of race to infer past criminality, the same argument can be applied
to any external signal that a job applicant may convey (intentionally or
unintentionally) when applying for a job. For example, employers may cue
in on such signals as gaps in employment history, levels of education, or
receipt of public assistance. Demonstrating empirically that the patterns observed for African Americans’ hiring outcomes hold more generally for other
stigmatized groups would surely buttress confidence in the empirical results
presented above and the interpretation that we are offering.
In this section, we explore whether employer-initiated criminal background
checks and the interaction between such checks and employer aversion to
hiring ex-offenders impact employer demand for other groups of potentially
stigmatized workers. While in the previous section we were able to analyze
the race of the most recently hired employees (an actual outcome), here we
must rely on employer responses to questions about the likelihood that they
would hire applicants from a set of potentially stigmatized groups. In addition
to the question concerning the likelihood that employers would hire an exoffender, employers were also queried about the likelihood that they would
hire welfare recipients, workers with gaps in their employment histories,
workers who have been unemployed for a year or more, and workers with
a GED instead of a high school diploma. For each of these questions we
coded a dummy variable equal to one if the employer responded that it would
either definitely or probably hire such applicants and to zero if it probably
or definitely would not hire such applicants. These dummy variables that
refer to the four types of applicants are our dependent variables in this section.
Table 5 presents model results for employer willingness to hire workers
for stigmatized groups. The structure of the presentation of results and the

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

472

the journal of law and economics

model specifications are identical to those for the gender-specific hiring outcomes analyzed in Table 4.16
We begin by summarizing the model results in which the interaction term
is omitted. In general, criminal background checks positively affect the likelihood that the employer indicates a willingness to hire workers from these
applicant pools. These positive effects are statistically significant at reasonable levels for the outcomes for spotty work history and being unemployed
for a year for specifications (1)–(3) but not for the final specification. For
the welfare recipient and GED outcomes, the coefficients on background
checks are small and statistically insignificant. One strong pattern in all of
the models is that the dummy variable indicating that employers are unwilling
to hire ex-offenders exerts strong negative and significant effects on employer
willingness to hire from these specific applicant pools.17 Hence, in addition
to some evidence of a positive impact of checking on employer willingness
to hire applicants from stigmatized groups, the consistent negative effects of
unwillingness to hire ex-offenders hint at the possibility that employers infer
that these characteristics signal previous criminal activity.
Turning to the difference-in-difference models containing the interaction
terms, all of the point estimates on the interaction terms are positive, which
suggests that the positive effects of a criminal background check on employer
willingness to hire these workers is greatest among employers that are least
willing to hire ex-offenders. However, the relative effects are significant only
for specifications (1) and (2) in the welfare recipient models and all specifications of the models for spotty work history. The latter results are quite
strong and merit further discussion.
In all four models containing interactions terms for the spotty work history
outcomes, we observe a rather strong pattern that is unaffected by the inclusion of additional control variables. First, employers that are unwilling to
hire ex-offenders are considerably less likely to indicate that they are willing
to hire applicants with gaps in their employment history. Second, this large
negative effect of unwillingness to hire ex-offenders is countered in large
part by whether such firms check criminal backgrounds. Hence, among firms
that do not check criminal backgrounds, the impact of unwillingness to hire
ex-offenders on the willingness to hire an applicant with a spotty work history
ranges from 20 to 24 percentage points (all statistically significant at the 1
percent level of confidence). On the other hand, among firms that do check
criminal backgrounds, the comparable effects of a stated unwillingness to
16
The one difference between the specifications in Table 4 and Table 5 occurs in specification
(4). In Table 5, specification (4), we do not control for the types of workers that an employer
would be unwilling to hire since the inversely coded dummy variables for these controls are
our dependent variables in this section.
17
These effects are all negative and statistically significant save for the coefficient on unwilling to hire in specification (4) of the models for applicants with general equivalency
diplomas.

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

criminality and racial hiring practices

473

hire ex-offenders ranges from 8 to 13 percentage points. These patterns
suggest a great degree of substitution between using formal criminal background checks and looking for gaps in employment history to screen out
potential felons.
Note that of the four outcomes analyzed in Table 5, the outcome indicating
employer willingness to hire applicants with gaps in their employment history
is perhaps the one that arguably conveys the strongest signal of previous
criminality. Given the strong findings for this particular outcome, and the
general results for the other three outcomes, we conclude that these findings
lend support to the racial hiring outcomes analyzed above.
VI.

Conclusion

The findings of this study are several. To begin, the empirical estimates
indicate that employers who perform criminal background checks are more
likely to hire black applicants than employers that do not. This positive
association remains even after adjusting for an establishment’s spatial proximity to black residential areas and for the proportion of applications that
come from African Americans. In the context of the theoretical arguments
discussed above, this positive net effect indicates that the adverse consequence of employer-initiated background checks on the likelihood of hiring
African Americans is more than offset by the positive effect of eliminating
statistical discrimination. To be sure, the group of workers who are excluded
by a background check are surely different from the group of workers who
are harmed by incorrect perceptions regarding their criminal histories. In
other words, behind the net changes are two offsetting gross effects that
impact the welfare of alternative groups of African American workers.
In addition, we find that the positive effect of criminal background checks
on the likelihood that an employer hires a black applicant is larger among
firms that are unwilling to hire ex-offenders. This pattern is consistent with
the proposition that employers with a particularly strong aversion to exoffenders may be more likely to overestimate the relationship between criminality and race and hence hire too few African Americans as a result. Moreover, these relative results are observed for the likelihood that the most recent
hire is a black male but not in models in which the outcome measures whether
the most recent hire is a black female. Finally, the results for black hiring
outcomes are generally supported by comparable results for models analyzing
employer willingness to hire workers from other potentially stigmatized
groups of applicants.
The results of this study suggest that curtailing access to criminal history
records may actually harm more people than it helps and aggravate racial
differences in labor market outcomes. Moreover, to the extent that statistical
discrimination engenders an endogenous behavioral response on the part of
young black men that serves to self-fulfill erroneous expectations, the long-

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

TABLE 5
Impact of Criminal Background Checks on the Willingness of Employers to Hire Stigmatized Applicants

Willingness to Hire
Welfare recipient:
Checks criminal backgrounds
Unwilling to hire ex-offenders
Checks # unwilling
Spotty work history:
Checks criminal backgrounds
Unwilling to hire ex-offenders
Checks # unwilling
Unemployed for a year or more:
Checks criminal backgrounds
Unwilling to hire ex-offenders
Checks # unwilling
Has a general equivalency diploma:
Checks criminal backgrounds
Unwilling to hire ex-offenders
Checks # unwilling

Specification 1

Specification 2

Specification 3

Specification 4

(1)

(1)

(1)

(1)

(2)

(2)

(2)

(2)

.012 (.011) Ϫ.009 (.018)
.018 (.012) Ϫ.007 (.019)
.021 (.016)
.011 (.026) Ϫ.008 (.018) Ϫ.006 (.028)
. . .
Ϫ.117 (.016) Ϫ.092 (.012) Ϫ.111 (.017) Ϫ.113 (.016) Ϫ.120 (.021) Ϫ.096 (.018) Ϫ.095 (.023)
. . .
.050 (.023)
. . .
.041 (.025)
. . .
.016 (.032)
. . .
Ϫ.003 (.035)
.031 (.020) Ϫ.021 (.032)
.039 (.022) Ϫ.032 (.034)
.041 (.026) Ϫ.038 (.042) Ϫ.032 (.030) Ϫ.096 (.046)
. . .
Ϫ.242 (.027) Ϫ.187 (.022) Ϫ.239 (.029) Ϫ.148 (.026) Ϫ.202 (.035) Ϫ.157 (.029) Ϫ.202 (.037)
. . .
.114 (.041)
. . .
.114 (.043)
. . .
.124 (.053)
. . .
.105 (.056)
.038 (.016)
.021 (.025)
.056 (.017)
.034 (.027)
.054 (.021)
.042 (.034)
.013 (.024) Ϫ.001 (.037)
. . .
Ϫ.140 (.021) Ϫ.116 (.017) Ϫ.132 (.023) Ϫ.115 (.021) Ϫ.123 (.027) Ϫ.117 (.024) Ϫ.127 (.030)
. . .
.048 (.032)
. . .
.037 (.034)
. . .
.019 (.042)
. . .
.023 (.046)
.010 (.008) Ϫ.004 (.012)
.007 (.008) Ϫ.009 (.013) Ϫ.007 (.009) Ϫ.025 (.016) Ϫ.005 (.011) Ϫ.027 (.017)
. . .
Ϫ.054 (.011) Ϫ.039 (.008) Ϫ.051 (.011) Ϫ.034 (.010) Ϫ.047 (.013) Ϫ.014 (.010) Ϫ.029 (.014)
. . .
.029 (.016)
. . .
.027 (.017)
. . .
.028 (.020)
. . .
.035 (.021)

Note.—Values are unadjusted and regression-adjusted first-difference and difference-in-differences estimates. Standard errors are in parentheses. “Willingness to hire”
indicates that an employer would definitely or probably hire an applicant with the indicated characteristic. The remainder of the model specifications (the results of which
are not reported in the table) correspond to those used in Table 3.

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

criminality and racial hiring practices

475

term consequences of such discrimination may be particularly pernicious.
Surely, calls to seal criminal history records fail to take into account this
unintended consequence and the market failure associated with the inferior
information that employers would have as a result.
This being said, however, the prescription for greater public access to
criminal history records runs into the thorny implementation problems associated with 52 nonstandardized information systems. In addition to the
nontrivial likelihood of false-positive background checks, the collateral consequences of complete access to criminal history records is sure to punish
many ex-offenders with relatively minor and distant run-ins with the law.
Clearly, more research is needed on the effect of a criminal history record
on the labor market outcomes of the ex-offender and his neighbor. In particular, more systematic research that evaluates the contribution of these
factors to racial inequality is needed.

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

APPENDIX
TABLE A1
Establishment Characteristics by Employer Self-Reported Likelihood
of Hiring Applicants with Criminal Backgrounds
Definitely
Will
Size:
!20 employees
20–99 employees
100–499 employees
500–999 employees
1,000ϩ employees
Industry:
Mining
Construction
Manufacturing
Transportation, communications, and utilities
Wholesale trade
Retail trade
Finance, insurance, and real estate
Services
Union (%)
Central city
Black hiring agent
Distance black
Distance white
Recruitment methods used:a
Help-wanted signs
Newspaper ads
Walk-ins
Referrals:
From current employees
From state agency
From private agency
From community agency
From school
From union
Uses affirmative action to recruit
Screening methods:a
Drug test/physical exam
Aptitude test
Knowledge test
Personality test
Background checks:
Criminal background
Education
References
Daily job tasks:
Customer contact
Phone conversations
Reading
Writing
Math/computations

Probably
Will

Probably
Not

Definitely
Not

.26
.29
.31
.06
.08

.31
.33
.27
.04
.05

.37
.32
.23
.04
.04

.36
.33
.20
.03
.07

.00
.02
.32
.05
.05
.20
.02
.30
15.94
.33
.05
17.35
22.57

.00
.03
.29
.05
.10
.15
.05
.31
13.17
.27
.07
17.97
22.63

.00
.03
.18
.06
.09
.19
.11
.32
12.48
.27
.06
17.80
22.58

.00
.01
.12
.06
.04
.17
.16
.36
17.67
.28
.06
17.19
22.26

.31
.45
.78

.28
.46
.74

.24
.48
.67

.27
.50
.66

.84
.46
.23
.33
.40
.08
.61

.84
.40
.21
.26
.34
.06
.55

.83
.31
.21
.24
.34
.06
.50

.81
.30
.17
.25
.38
.06
.56

.20
.09
.16
.03

.15
.09
.17
.05

.15
.14
.16
.07

.19
.14
.15
.09

.39
.66
.92

.45
.69
.95

.47
.68
.96

.67
.70
.97

.52
.48
.53
.28
.63

.49
.49
.56
.29
.66

.60
.55
.52
.30
.67

.71
.55
.58
.34
.64

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

criminality and racial hiring practices

477

TABLE A1 (Continued )
Definitely
Will
Computer work
Job qualifications:
High school diploma
Recent work experience
Specific experience
References
Vocational education
Very important requirement of new
employees:
Physically attractive
Physical neatness
Polite
Verbal skills
Motivation
Speaks English
Type of applicants who would probably not be
hired:
On welfare
With general equivalency diploma
Spotty work history
Unemployed for a year

Probably
Will

Probably
Not

Definitely
Not

.48

.47

.54

.51

.57
.63
.55
.69
.34

.68
.68
.60
.67
.40

.74
.70
.60
.74
.38

.79
.69
.62
.78
.39

.09
.44
.71
.54
.71
.44

.10
.45
.70
.54
.70
.47

.11
.56
.80
.64
.76
.59

.17
.62
.83
.72
.76
.65

.01
.01
.21
.06

.04
.02
.36
.13

.10
.03
.51
.21

.18
.11
.46
.26

Note.—All figures are conditional averages and use sample weights.
a
Variables equal one if employer reports regularly using the method.

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

TABLE A2
Establishment Characteristics and Frequency with Which Employers Check the
Criminal Backgrounds of Applicants
Always
Size:
!20 employees
20–99 employees
100–499 employees
500–999 employees
1,000ϩ employees
Industry:
Mining
Construction
Manufacturing
Transportation, communications, and utilities
Wholesale trade
Retail trade
Finance, insurance, and real estate
Services
Union (%)
Central city
Black hiring agent
Distance black
Distance white
Recruitment methods used:a
Help-wanted signs
Newspaper ads
Walk-ins
Referrals:
From current employees
From state agency
From private agency
From community agency
From school
From union
Uses affirmative action to recruit
Screening methods:a
Drug test/physical exam
Aptitude test
Knowledge test
Personality test
Background checks:
Criminal background
Education
References
Daily job tasks:
Customer contact
Phone conversations
Reading
Writing
Math/computations
Computer work
Job qualifications:
High school diploma
Recent work experience

Sometimes

Never

.24
.31
.28
.08
.10

.28
.31
.27
.06
.09

.38
.32
.24
.03
.04

.00
.02
.10
.08
.04
.15
.14
.40
23.65
.28
.09
17.36
22.42

.00
.03
.20
.04
.10
.19
.08
.34
13.23
.31
.07
17.59
22.55

.00
.02
.27
.05
.09
.17
.06
.33
11.23
.26
.04
17.78
22.42

.29
.51
.72

.30
.50
.73

.23
.46
.66

.85
.40
.22
.32
.47
.10
.69

.85
.40
.23
.30
.35
.08
.57

.80
.29
.20
.22
.32
.04
.48

.24
.15
.18
.09

.18
.13
.18
.05

.11
.10
.15
.06

1.00
.83
.98

1.00
.83
.98

.00
.58
.93

.69
.55
.62
.38
.65
.54

.62
.54
.56
.29
.62
.52

.52
.54
.54
.34
.68
.54

.76
.70

.74
.72

.68
.69

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

criminality and racial hiring practices

479

TABLE A2 (Continued )
Always
Specific experience
References
Vocational education
Very important requirement of new
employees:
Physically attractive
Physical neatness
Polite
Verbal skills
Motivation
Speaks English
Type of applicants who would probably not be
hired:
On welfare
With general equivalency diploma
Spotty work history
Unemployed for a year

Sometimes

Never

.63
.80
.40

.60
.75
.42

.63
.69
.39

.14
.55
.81
.70
.76
.60

.10
.54
.74
.56
.73
.53

.10
.52
.77
.63
.76
.56

.09
.04
.40
.15

.07
.02
.41
.16

.09
.04
.43
.20

Note.—All figures are conditional averages and use sample weights.
a
Variables equal one if employer reports regularly using the method.

References
Aigner, Dennis J., and Glen G. Cain. 1977. ”Statistical Theories of Discrimination in Labor Markets.” Industrial and Labor Relations Review 30:
175–87.
Altonji, Joseph G., and Charles R. Pierret. 2001. “Employer Learning and
Statistical Discrimination.” Quarterly Journal of Economics 116:313–50.
Autor, David H., and David Scarborough. 2004. “Will Job Testing Harm
Minority Workers.” Working paper. Massachusetts Institute of Technology,
Cambridge.
Bates, Timothy. 1993. Banking on Black Enterprise: The Potential of Emerging Firms for Revitalizing Urban Economies. Washington, D.C.: Joint
Center for Political and Economics Studies.
Bonczar, Thomas P., and Allen J. Beck. 1997. “Lifetime Likelihood of Going
to State or Federal Prison.” Bureau of Justice Statistics Special Report,
NCJ-160092. Washington, D.C.: U.S. Department of Justice.
Bushway, Shawn D. 1998. “Labor Market Effects of Permitting Employer
Access to Criminal History Records.” Working paper. University of Maryland, College Park.
———. 2004. “Labor Market Effects of Permitting Employer Access to
Criminal History Records.” Journal of Contemporary Criminal Justice 20:
276–91.
Carrington, William J., and Kenneth R. Troske. 1998. “Interfirm Segregation
and the Black-White Wage Gap.” Journal of Labor Economics 16:231–60.

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

480

the journal of law and economics

Hahn, J. M. 1991. “Pre-employment Information Services: Employers Beware.” Employee Relations Law Journal 17:45–69.
Holzer, Harry J. 1996. What Employers Want: Job Prospects for Less Educated Workers. New York: Russell Sage Foundation.
Holzer, Harry J., and Keith R. Ihlanfeldt. 1996. “Spatial Factors and the
Employment of Blacks at the Firm Level.” New England Economic Review
May/June, pp. 65–68.
———. 1998. “Customer Discrimination and Employment Outcomes for
Minority Workers.” Quarterly Journal of Economics 113:835–68.
Holzer, Harry, Joleen Kirschenman, Philip Moss, and Chris Tilly. 2000.
Multi-city Study of Urban Inequality, 1992–1994 (computer file). 2d
ICPSR version. Ann Arbor, Mich: Inter-university Consortium for Political
and Social Research (distributor).
Ihlanfeldt, Keith R., and Madelyn V. Young. 1996. “The Spatial Distribution
of Black Employment between the Central City and the Suburbs.” Economic Inquiry 34:693–707.
Kling, Jeffrey. 1995. “High Performance Work Systems and Firm Performance.” Monthly Labor Review 118(5):29–36.
Loury, Glen C. 2002. The Anatomy of Racial Inequality. Cambridge, Mass.:
Harvard University Press.
Lundberg, Shelly, and Richard Startz. 1983. “Private Discrimination and
Social Intervention in Competitive Labor Markets.” American Economic
Review 72:340–47.
Pager, Devah. 2003. “The Mark of a Criminal Record.” American Journal
of Sociology 108:937–75.
Raphael, Steven, Michael Stoll, and Harry J. Holzer. 2000. “Are Suburban
Firms More Likely to Discriminate against African-Americans?” Journal
of Urban Economics 48:485–508.
Scott, R. Craig. 1987. “Negligent Hiring: Guilt by Association.” Personnel
Administrator 32:32–34.
Stoll, Michael A., and Steven Raphael. 2000. “Racial Differences in Spatial
Job Search Patterns: Exploring the Causes and Consequences.” Economic
Geography 76:201–23.
Turner, Susan C. 1997. “Barriers to a Better Break: Employer Discrimination
and Spatial Mismatch in Metropolitan Detroit.” Journal of Urban Affairs
19:123–41.
U.S. Department of Justice. 1999. Compendium of State Privacy and Security
Legislation: 1999 Overview. Washington, D.C.: Department of Justice.

This content downloaded from 164.67.54.47 on Tue, 12 Apr 2016 19:05:26 UTC
All use subject to http://about.jstor.org/terms

 

 

Stop Prison Profiteering Campaign Ad 2
CLN Subscribe Now Ad
Federal Prison Handbook - Side