Why insurance could unlock opportunity for thousands of previous offenders
I was 7 when my father went to prison. I remember when he was allowed an outing in the park, a rare and special gift, knowing even at the time to hold on to every moment he could push me on the swing. I remember him finally coming home and seeing the classifieds in the paper open on the table. The unsaid imperative: find work.
The classifieds didn’t work out, the sting of a record too great. In a stroke of good fortune, a friend of a friend took a chance and hired my dad despite his past. He became a travel agent, helping people plan their dream vacations to faraway places while the terms of his probation kept him landlocked.
That one hire, that one “yes,” changed the trajectory of my life, too. It allowed us to get back to a version of normal where I could focus on my future.
April is Second Chance Month, a time to reflect on the barriers that people with criminal records — and their families — face long after they have served their time. Chief among those barriers is employment. 64% of all unemployed men have some form of criminal record. For years, policymakers have sought to either regulate this problem away through reforms like ban-the-box laws or subsidize it through tax credits, but research shows that most of these interventions have not meaningfully changed outcomes.
At Arnold Ventures, where I work on criminal justice policy, we go to the evidence first to see what works. What emerged in this area surprised us: Making second-chance hiring less risky to employers — through insurance — could make a big difference.
Employers are often concerned that hiring someone with a record could make them more vulnerable to issues like theft on the job. We don’t actually know how true this is, given the dearth of data. But there is insurance that addresses this type of risk: Crime and safety coverage is a standard part of policies that employers purchase to cover the cost of thefts committed by their employees while working. Unfortunately, these policies typically exclude employees with a criminal record, meaning employers are on their own if they encounter any issues. This affects small- and medium-sized businesses the most. Large businesses either self-insure or buy custom insurance policies. But for the millions of small- and medium-sized businesses that lack the resources to negotiate custom policies, the coverage gap for workers with criminal records is a powerful, invisible deterrent to giving someone a second chance.
A rigorous randomized controlled trial by economists Zoe Cullen, Will Dobbie and Mitchell Hoffman conducted a real-world experiment to see what interventions shifted employer behavior. When employers on a staffing platform were offered crime insurance covering potential damages from their hires, their willingness to hire workers with records jumped by 16 percentage points. Employers weren’t opposed to second chance hiring on principle. They were rationally responding to real financial exposure — and when that was addressed, they shifted their hiring decisions.
How could we use this insight to help more people? Arnold Ventures is exploring ways to close this standard coverage gap. For instance, we’re working with state and city leaders to explore government-backed funds that would reimburse businesses for covered losses their insurers won’t pay. This could generate useful data on payouts to help commercial insurers offer such products in the future.
Some might argue that we shouldn’t invest public resources to help people with records. But preventing people with records from getting work actually may cost us all more in the long term — in subsidies for public benefits, damage from new crimes and ultimately system costs for reincarceration. As I can attest, helping someone reintegrate not only pays individual benefits, but helps their family and ultimately their community. Reentry is an area where we need innovation to make society healthier and safer.
I never expected to get excited about insurance. But insurance has extraordinary power to shape what people feel safe doing. It turns an uncertain risk into a manageable decision. For the employer weighing whether to hire a qualified candidate who happens to have a record, knowing they’re covered could make all the difference.
My father was lucky — he knew someone willing to take that chance. Most people coming home from prison don’t. April is Second Chance Month. Let’s commit to building a system where it doesn’t take luck to make a match between a qualified employee and a business eager to hire. Let’s realign incentives to make it easier for more employers to say yes.
