Estimating the Earnings Loss Associated with a Criminal Record and Suspended Driver’s License

58 Pages Posted: 28 Mar 2022 Last revised: 29 Sep 2022

See all articles by Colleen V. Chien

Colleen V. Chien

UC Berkeley School of Law

Alexandra George

Santa Clara University, Department of Political Science

Srihari Shekhar

Santa Clara University - Computer Science and Engineering

Robert Apel

Rutgers, The State University of New Jersey - Rutgers University, Newark

Date Written: March 24, 2022

Abstract

As states pass reforms to reduce the size of their prison populations, the number of Americans physically incarcerated has declined. However, the number of people whose employment and related opportunities are limited due to their criminal records continues to grow. Another sanction that curtails economic opportunity is the loss of one’s driver’s license for reasons unrelated to driving. While many states have “second chance” laws on the books that provide, e.g. expungement or driver’s license restoration, a growing body of research has documented large “second chance gaps” between eligibility and delivery of relief due to the poor administration of second chance relief. This paper is a first attempt to measure the cost of these “paper prisons” of limited economic opportunity due to expungable records and restorable licenses, in terms of annual lost earnings. Analyzing the literature, we estimate the annual earnings loss associated with misdemeanor and felony convictions to be $5,100 and $6,400, respectively, and that of a suspended license to be $12,700.

We use Texas as a case study for comparing the cost (in terms of lost earnings) of the state’s “paper prisons” – living with sealable records or restorable licenses – with the cost of its physical prisons. In Texas, individuals with criminal convictions may seal their records after a waiting period. But analyzing administrative data, we find that approximately 95% of people eligible for relief have not accessed it. This leaves 670,000 people in the “second chance sealing gap” eligible for but not accessing second chance relief, translating into an annual earnings loss of about $3.5 billion. Similarly, people that have lost driver’s licenses are entitled to get their licenses restored under the law (in the form of “occupational driver’s licenses,” or “ODLs”) in order to drive to work or school. But using a similar approach, we find that about 80% of the people that appear eligible for restored driver’s licenses in Texas have not received them. This translates into about 430,000 people who needlessly lack licenses and a lower-bounds earnings loss of about $5.5 billion. Based on these figures, we find the cumulative annual earnings loss associated with Texas’s “paper prisons” of limited economic opportunity due to lost but restorable licenses and convictions records eligible for sealing to be comparable with, and likely more than, the yearly cost to Texas of managing its physical prisons of around $3.6 billion.

Keywords: criminal records, second chances, drivers license, cost-benefit analysis, uptake analysis, computational policy

JEL Classification: K14, K4

Suggested Citation

Chien, Colleen V. and George, Alexandra and Shekhar, Srihari and Apel, Robert, Estimating the Earnings Loss Associated with a Criminal Record and Suspended Driver’s License (March 24, 2022). 64 ARIZ. L. REV. 675 (2022), Santa Clara Univ. Legal Studies Research Paper , Available at SSRN: https://ssrn.com/abstract=4065920

Colleen V. Chien (Contact Author)

UC Berkeley School of Law ( email )

302 JSP
2240 Piedmont Ave
Berkeley, CA 94720
United States
510-664-5254 (Phone)

Alexandra George

Santa Clara University, Department of Political Science

United States

Srihari Shekhar

Santa Clara University - Computer Science and Engineering ( email )

United States

Robert Apel

Rutgers, The State University of New Jersey - Rutgers University, Newark ( email )

180 University Avenue
Newark, NJ 07102
United States

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