Economics Seminar - "Insights on the Criminal Background Check Process from Administrative Data"

Research has consistently shown that criminal records can serve as a significant barrier in the labor market and other key areas of economic life. However, little is known about the types of criminal histories that are common among workers in the labor force, nor about the responses of employers to the complex, multidimensional object that is a criminal record. To elucidate this, we use a large administrative dataset containing 65 million applicants' criminal histories, as well as information about how the respective firms they applied to responded to their criminal histories during the background check process. Fourteen percent of applicants have a legally reportable criminal record, though this differs based on the reporting laws in their state. We document that most charges accrue to individuals with no prior criminal history and that most applicants' records consist only of misdemeanors (54%). Many charges (45%) are non-convictions of which the candidates were determined to not be legally guilty. Firms respond strongly to felony records and violent records, ending the hiring process by issuing an "adverse action notice" over 60% of the time for applicants with either of these record types present. Systemic differences in criminal justice contact by race and gender lead to relatively higher rates of hiring discontinuation for Black and male applicants. Finally, we show that rates of adverse action notices issued to candidates with criminal records have fallen in recent years in line with "fair chance'' hiring practices.