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Working Paper
The Unintended Consequences of Employer Credit Check Bans on Labor and Credit Markets
Since the Great Recession, 11 states have restricted employers' access to the credit reports of job applicants. We document that county-level vacancies decline between 9.5 percent and 12.4 percent after states enact these laws. Vacancies decline significantly in affected occupations but remain constant in those that are exempt, and the decline is larger in counties with many subprime residents. Furthermore, subprime borrowers fall behind on more debt payments and reduce credit inquiries postban. The evidence suggests that, counter to their intent, employer credit check bans disrupt labor and ...
Working Paper
Health versus Wealth: On the Distributional Effects of Controlling a Pandemic
To slow the spread of COVID-19, many countries are shutting down nonessential sectors of the economy. Older individuals have the most to gain from slowing virus diffusion. Younger workers in sectors that are shuttered have the most to lose. In this paper, we build a model in which economic activity and disease progression are jointly determined. Individuals differ by age (young and retired), by sector (basic and luxury), and by health status. Disease transmission occurs in the workplace, in consumption activities, at home, and in hospitals. We study the optimal economic mitigation policy of a ...
Working Paper
Between College and That First Job: Designing and Evaluating Policies for Hiring Diversity
Despite widespread caste disparities, compensatory hiring policies remain absent from the Indian private sector. This paper employs novel administrative data on the job search from an elite college and evaluates policies to promote hiring diversity. Application reading, written aptitude tests, large group debates, and job choices do not explain caste disparities. Disparities arise primarily between the final round, comprising non-technical personal interviews, and job offers; the emergence closely parallels caste revelation. For promoting diversity, hiring subsidies — similar in spirit to ...
Working Paper
“No more credit score”: employer credit check bans and signal substitution
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 ...
Working Paper
The Unintended Consequences of Employer Credit Check Bans for Labor Markets
Over the last decade, 11 states have restricted employers? access to the credit reports of job applicants. We document a significant decline in county-level vacancies after these laws were enacted: Job postings fall by 5.5 percent in affected occupations relative to exempt occupations in the same county and the same occupation nationwide. Cross-sectional heterogeneity in the estimated effects suggests that employers use credit reports as signals: Vacancies fall more in counties with a large share of subprime residents, while they fall less in occupations with other commonly available signals.
Working Paper
The Unintended Consequences of Employer Credit Check Bans on Labor and Credit Markets
Since the Great Recession, 11 states have restricted employers? access to the credit reports of job applicants. We document that county-level vacancies decline between 9.5 percent and 12.4 percent after states enact these laws. Vacancies decline significantly in affected occupations but remain constant in those that are exempt, and the decline is larger in counties with many subprime residents. Furthermore, subprime borrowers fall behind on more debt payments and reduce credit inquiries postban. The evidence suggests that, counter to their intent, employer credit check bans disrupt labor and ...