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1.In 2007 the state of Washington banned firms from checking job applicants' credit scores. Several other states followed suit. The intention of the ban is

1.In 2007 the state of Washington banned firms from checking job applicants' credit scores. Several other states followed suit. The intention of the ban is to promote equal opportunities for all applicants. An applicant with a low credit score is likely to be a minority or young (less than 22 years of age). Clifford and Shoad (2016) find that these laws results in fewer jobs for the young and minorities, not more. Use a discussion of informational economics and signaling to explain these results (Akerlof). Why would a firm want a potential employee with a high credit score? Can you theorize an explanation that will conform with Clifford and Shoals observations? Paper is linked below.

... http://scholar.harvard.edu/files/shoag/files/no_more_credit_score_employer_credit_check_bans_and_signal_sub.pdf?m=14483

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