Randi Hjalmarsson, University of Gothenburg

Job Sort and the Labor Market Effects of a Criminal Record

Abstract

We examine the effects of a criminal record on labor market outcomes and the mediating role of job sorting using Swedish register data. Prime-age adults with criminal records earn about 30% less than observably similar adults without records and are concentrated in specific employers and occupations.

To estimate the causal effect of a criminal record, we use an event study design that compares outcomes for adults charged with an offense for the first time to matched adults who were suspected of a similar offense but not charged. Acquiring a criminal record reduces months employed by 2% and annual earnings by 5%. These negative effects are: twice as large for more serious or subsequent charges, not driven by job displacement or incapacitation, and not mitigated by automatic record expungement, which typically occurs 5 or 10 years after case disposition.

We classify firms by their propensity to hire workers with criminal records, holding suspected offense history fixed. A criminal record reduces employment at firms classified as less likely to hire workers with criminal records, increases employment at other
firms, and decreases monthly earnings across all firm types. Firm propensity to hire workers with criminal records varies substantially—even within industries—and is linked to firm size and managers’ prior exposure to people with records. Leveraging manager moves across small firms, we find that when a firm hires a new manager with greater prior exposure to people with
criminal records, it hires more people with records, with no detectable effect on productivity.

Randi Hjalmarsson received her PhD in economics from Yale University in 2005. She was an Assistant Professor of Economics at the University of Maryland, School of Public Policy from 2005 to 2009, a lecturer and Professor at Queen Mary University of London from 2010-2013. She has since settled in Sweden, and is currently Professor of Economics at the University of Gothenburg.

She has done extensive research on the economics of crime and the criminal justice system. Her current research emphasizes (i) the determinants of crime, including education, military service and the role of the family, neighborhood and peers), (ii) the impact of jury composition on trial verdicts and sentences and the dynamics of jury decision making, and (iii) racial biases in the criminal justice system.

Previously, she has studied the effects of prison, the death penalty, and gun shows on crime. Her work has been published in leading academic journals including the Quarterly Journal of Economics, Review of Economics and Statistics, and The Economic Journal. Her research has been funded, in part, by grants from the National Science Foundation and the Swedish Research Council's Distinguished Young Researchers Program.

You can read more about Randi Hjalmarsson here

CEBI contact: Ekaterina Travova