Do Ex-Offenders Face Discrimination in the Labor Market? Because of Expected Inferior Reciprocity?

The disadvantage of previously convicted applicants, an often overlooked social group, at the labor market represents an important and complex issue. Despite plausibility, a proper proof of discrimination with typically available data is extremely difficult. In this paper we systematically investigate whether and how previously convicted applicants suffer from distrust in their search for a job and in wage payment when employed. As a general result, we can show that trust plays a critical role in motivating employers’ hiring and wage determination behavior. Thus, previously convicted applicants have significantly lower opportunities to be employed and to receive an appropriate wage. Besides conviction applicants’ citizenship plays a mayor role. Moreover, we proof that employers’ decisions are not only driven by an expected inferior reciprocity but also by pure taste of discrimination or mere avoidance of interaction. JEL-Classification: C91, M51, J00, J71