Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171764
Authors: 
Clifford, Robert
Shoag, Daniel
Year of Publication: 
2016
Series/Report no.: 
Working Papers 16-10
Abstract: 
In the past decade, most states have banned or considered banning the use of credit checks in hiring decisions, a screening tool that is widely used by employers. Using new Equifax data on employer credit checks, the Federal Reserve Bank of New York Consumer Credit Panel/Equifax data, and the LEHD Origin-Destination Employment data, we show that these bans increased employment of residents in the lowest-credit score census tracts. The largest gains occurred in higher-paying jobs and in the government sector. At the same time, using a large database of job postings, we show that employers increased their demand for other signals of applicants' job performance, like education and experience. On net, the changes induced by these bans generate relatively worse outcomes for those with mid-to-low credit scores, for those under 22 years of age, and for blacks, groups commonly thought to benefit from such legislation.
JEL: 
J78
M50
Document Type: 
Working Paper

Files in This Item:
File
Size
829.12 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.