To Ban the Box, or Not to Ban the Box? How Policy Change Can Affect Hiring and Employment

In the 2014 Uniform Crime Report of the Federal Bureau of Investigation, the number of arrests in the United States amounted to 11.2 million. Moreover, the Bureau of Justice Statistics estimates that approximately 1.5 million prisoners were being held in state and federal custody at the end of 2014. As a result, more Americans have some type of criminal record. One of many consequences of having a criminal record is that it reduces one’s chances of finding employment. For those recently released from prison, the likelihood of finding a job decreases dramatically because of their records, particularly since many employers include questions asking if applicants have ever been convicted of a crime. According to a 2012 survey by the Society for Human Resource Management, around 86 percent of employers use criminal background checks on at least some candidates.

Given the limitations that these practices impose on job seekers, some communities have enacted measures to exclude questions related to criminal backgrounds during the initial employment application process. This kind of measure is referred to as “Ban the Box” because it entails removing the question and check box asking whether applicants have criminal records. Thus far, more than 100 cities and counties nationwide have adopted this measure.

What are the labor market effects of excluding application questions about a prospective employee’s criminal past? Researchers Daniel Shoag and Stan Veuger use data on Ban the Box policy implementation, neighborhood crime rates, and job advertisement—taking advantage of the variation when cities adopt the Ban the Box measure—to determine how this measure affects certain groups and how employers have responded to these changes in the screening process.

The authors compare employment data for the residents of high-crime neighborhoods before and after the introduction of the measure. After controlling for other fixed effects between neighborhoods, they find statistically significant evidence that high-crime neighborhoods that implemented Ban the Box experienced an increase of 3.5 percent employment, in comparison to high-crime neighborhoods that did not enact the Ban the Box measure. For the highest-crime neighborhoods, the estimated increase in employment was 14 percent.

Broken down further by applicant attributes, the researchers identify a three percent increase in employment rate for African-American males after Ban the Box policies are implemented. In addition, the authors estimate whether the Ban the Box measure has an effect on background checks. They find that the Ban the Box measure is associated with a statistically significant decrease of 0.16 fewer criminal background checks per hire. Additionally, the findings show that, for women, employment decreases by 0.2 percent on average. This result might be associated with the fact that women are less likely to have criminal records.

While employment rates overall, and particularly for certain racial subgroups, increase, the authors also find that, after enacting Ban the Box, there is a statistically significant increase of 1.5 percent in the number of job postings requiring a college degree and an increase of two percent in the number of job postings asking for prior experience (when controlling for city and state fixed effects). The authors interpret this result as some employers’ response to the Ban the Box measure, given that these requirements constitute other signaling mechanisms in the labor market.

This paper provides evidence that the Ban the Box measure can impact employment rates for higher-crime communities and African-American males in particular. This suggests that employers who previously included questions about an applicant’s criminal records are now more likely to interview potential employees on the basis of experience and education instead of criminal background. For job seekers with records, improving the process of finding and maintaining employment is critical to their livelihood and reducing the likelihood of future criminal activity. As more communities look to adopt this measure, further research on the long-term effects of Ban the Box is needed to better understand the extent of its impact.

Article Source: Shoag, Daniel, and Stan Veuger. “No Woman No Crime: Ban the Box, Employment, and Upskilling.” AEI Economics Working Paper 08, 2016.

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