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that require significant customer contact or the handling of cash or expensive merchandise and

especially when the ability to monitor employee performance is imperfect. Finally, employers

can be held legally liable for the criminal actions of their employees, and thus fear of litigation

may substantially deter employers from hiring applicants with criminal history records (Holzer

et. al., Forthcoming; Bushway, 1996).

Though there are strong reasons to suspect that employers would be averse to hiring ex-

offenders, one concern is that our measure of demand may reflect employers’ subjective

responses to this question and therefore may not correlate with their actual behavior. Figure 2

provides some evidence on this question by showing the fraction of employers that have hired at

least one ex-offender over the past year stratified by their responses to the question concerning

willingness to consider ex-offenders.8 We do note the limitations of these comparisons as

employers willingness to accept an applicant with a criminal background into the last filled

noncollege job may be influenced by the characteristics of that job (e.g., job requires customer

contact or employer is required by law to do a background check for that job). Still, the

comparison is likely to be instructive.

Figure 2 shows that about 20 percent of employers responded that they hired at least one

ex-offender over the past year.9 To put this number in some perspective, our survey also asked

whether the firm hired as least one welfare recipient over this period. About 30 percent of

employers indicated that they did. Of course, these differences in actual hiring between ex-

8 Alternatively, we compare the current prospective overall demand for ex-offenders defined in Figure 3 with actual overall demand for ex-offenders over the past year, arguably a more direct comparison. We find that the correlation is positive (.35) and statistically significant at the 1% level of confidence.

9 Of the employers that had hired at least one an ex-offender over the past year, our survey shows that about 70 percent of these employers indicated that the ex-offenders they hired had work experience since being released from prison, and 21 percent of employers used the Work Opportunity Tax Credit when hiring them, as noted earlier. The low level of use of the WOTC in hiring ex-offenders indicates that the efficacy of these tools will be limited without more outreach to firms or assistance (from intermediaries) in helping them obtain it.


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