At least 10M Americans have lost their licenses for reasons unrelated to driving. What is the impact of reforming license suspension practices and restoring licenses to drivers? Using CPS data and a staggered diff-in-diff design, our new working paper suggests an unexpected payoff – measurable increases in state-wide employment when reforms are of high-quality and administered well. When people can drive legally, they earn more. The working abstract is below and the draft paper can be downloaded here.
Impact of Debt-Based License Suspension Reform on Statewide Employment*
Robert Apel, School of Criminal Justice, Rutgers University–Newark, Paper Prisons Initiative
Colleen Chien, School of Law, University of California–Berkeley, Paper Prisons Initiative
Abstract
We examine the impact of debt-based driver’s license suspension reform laws enacted between 2016 and 2023 on statewide employment rates in the United States using monthly Current Population Survey data. We rely on surveys of state-level reform advocates, internet research, and the ratings of people who themselves have lost drivers licenses to evaluate and rate 24 separate reforms enacted between 2016 and 2023 that address license suspensions due to failure to pay (FTP) or failure to appear (FTA) We employ a variety of difference-in-differences estimators (static and staggered) to estimate the average treatment effect on reform states. Our findings indicate that the impact of reform varies based on its comprehensiveness, and also by race. Overall, while limited state reforms show no significant effect, reforms that are more comprehensive are associated with employment growth of about 1.3%, representing a 2.2% relative gain over the mean employment rate. The impact appears to grow steadily over two-and-a- half years following implementation. We further analyze each reform provision alone although we caveat our findings with the acknowledgment that many of the dimensions overlap. Our analyses suggests that comprehensive failure to pay reform (FTP) is followed by stronger employment gains, whereas partial FTP and FTA (partial or full) reform have no employment impact. We also find that reforms that eliminate administrative burden by making reinstatement or automatic or that retroactively reinstate licenses yield more unemployment benefits; omnibus reforms have an impact whereas single-issue bills do not, and that minority communities, which have been historically disproportionately harmed by license reforms, benefit the most. These results suggest that debt-based license suspension reform, despite not being directly targeted as a labor market intervention, may have a meaningful positive effect on statewide employment rates. However, the effectiveness of such reforms depends on their scope and comprehensiveness, as well as their implementation. We are in the process of implementing a companion survey which will enable us to better understand the mechanisms of detectable impact on earnings of the different types of reforms, or lack thereof.
*Colleen Chien is Professor of Law at Berkeley Law School, co-director of the Berkeley Center for Law and Technology, Faculty advisor to the Berkeley Criminal Law & Justice Center, and founder of the Paper Prisons Initiative (paperprisons.org). Robert Apel is a criminologist, Professor at Rutgers University-Newark, and affiliate researcher with the Paper Prisons Initiative. Supported by a grant from the Arnold Foundation. The authors thank Alonzo Harvey, UC Berkeley Political Science undergraduate, Pillars of the Community/Community Activist, Berkeley Underground Scholar Transfer Coordinator, Co-Founder of GangstaNerdz and member of the Paper Prisons Initiative, Sandy Xie, PhD student in Criminology from Rutgers University Newark, Berkeley Law 2L Juliette Draper, Jenny Stukenberg, Leo Ding, all of the Paper Prisons Initiative, and the amazing librarians at Berkeley Law, for excellent research assistance and Mary Mergler and Tim Curry of the Fines and Fees Justice Center and large numbers of advocates for sharing their expertise and experiences. Correspondence: cchien@berkeley.edu, ra437@scj.rutgers.edu
