Direct incentives may increase employment of people with criminal records

Abstract

AbstractResearch summaryAlthough society benefits when people with criminal records are employed, employers are reluctant to hire them. Can we diminish this reluctance with direct incentives that reduce the cost of employing record‐holders or that compensate for the associated risk? If so, will the beneficial effects of incentives emerge under traditional hiring, where job applicants disclose criminal history information at the application stage, and under Ban‐the‐Box, where they do not? To answer these questions, we conducted two preregistered experiments with a national sample of hiring decision‐makers (n = 1,000). The first was a conjoint analysis where participants chose between applicants who randomly varied on eight attributes, including criminal record (n = 13,998 choices). It corresponded to traditional hiring, where applicants’ criminal records are available at the outset. The second experiment involved a series of picture‐based factorial vignettes depicting tentatively hired employees later discovered to have records (n = 3,989 decisions). It approximated Ban‐the‐Box. In both experiments, a $2,400 tax credit and $25,000 insurance against losses from employee dishonesty reduced participants’ reluctance to hire record‐holders. Rehabilitation certificates also had beneficial effects under Ban‐the‐Box.Policy implicationsAcross two experiments, we found that a $2,400 tax credit and $25,000 insurance both reduced participants’ reluctance to hire record‐holders; they did so under traditional hiring and Ban‐the‐Box, and they did so regardless of whether applicants had misdemeanor or felony convictions. The clear policy implication is that employers should receive both incentives. Two federal programs, the Work Opportunity Tax Credit and the Federal Bonding Program, currently offer similar incentives, but neither program is used widely. Our findings indicate that steps should be taken to increase their use and to expand them. Because rehabilitation certificates were also helpful for getting record‐holders hired, steps should be taken to increase their use as well.