Banning Information in Hiring Decisions

31 Pages Posted: 13 Jun 2019

See all articles by Anthony M. Marino

Anthony M. Marino

University of Southern California - Marshall School of Business

Date Written: May 28, 2019

Abstract

Over the past decade, federal, state and local governments have restricted the types and uses of information in hiring and promotion decisions. Examples include the banning of credit reports and criminal records. This paper presents a simple microeconomic model of a competitive labor market and studies the economic effects of information bans. The key trade off is between allocative efficiency and helping a labor type with an undesirable characteristic. We compare information bans to direct subsidies. Moreover, we discuss the case where the ban creates negative feedback on the perceptions of firms considering workers of the bad type.

Keywords: Banning, Information

JEL Classification: J2, L51

Suggested Citation

Marino, Anthony M., Banning Information in Hiring Decisions (May 28, 2019). Available at SSRN: https://ssrn.com/abstract=3396006 or http://dx.doi.org/10.2139/ssrn.3396006

Anthony M. Marino (Contact Author)

University of Southern California - Marshall School of Business ( email )

Dept. of Finance & Business Economics
Los Angeles, CA 90089
United States
213-740-6525 (Phone)
213-740-6650 (Fax)

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