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Ban the Box? Information, Incentives, and Statistical Discrimination (with John Patty)

Microeconomics Seminar 2020-2021
joint with the Département de sciences économiques, Université de Montréal

Organizer : Sean Horan (U. of Montreal)

* Invitation only. Please contact the organizer if you would like access.

RÉSUMÉ: “Banning the Box” refers to a policy campaign aimed at prohibiting employers from soliciting applicant information that could be used to statistically discriminate against categories of applicants (in particular, those with criminal records). In this paper we examine how the concealing or revealing of informative features about an applicant’s identity affects hiring, wages, and, most importantly, applicant incentives to invest in human capital. We show that there exist situations in which an employer and an applicant are in agreement about whether to ban the box; banning the box can be Pareto optimal, Pareto dominated, or conflictual, depending on underlying conditions. Our results have policy implications spanning beyond employment decisions, including the use of credit checks by landlords and standardized tests in college admissions.

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