Job Sorting and the Labor Market Effects of a Criminal Record
Author:
Posted: 13 November 2026
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, largely within industries. 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 annual earnings by 5%, with larger effects for more serious charges. Using a record registry reform, we show that when charges are not visible to employers, the same design yields no detectable effects. The evidence indicates a central role for the record itself, rather than sanctions or job disruption generated by the adjudication process. 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 within firms. Firm propensity to hire workers with criminal records varies substantially, including within industry, and is decreasing in firm size and increasing in managers' prior exposure to people with records.