John J. Donohue

Allocating Resources among Prisons and Social Programs in the Battle against Crime

This article evaluates the cost and crime‐reducing potential of prisons and social spending, setting forth the conditions under which a shift in resources from an expanding prison population into social spending would lead to a reduction in total crime. Preschool enrichment programs coupled with family intervention have generated impressive results in reducing crime in a number of different studies. Targeting of resources toward those children most at risk of criminal behavior is necessary to generate cost‐effective crime reduction, but this may be difficult to achieve because of political or constitutional constraints. Given precise targeting, and if a broadly implemented preschool program (more enriched than the current Head Start program) could generate half the crime‐reduction benefits achieved in the pilot studies, then cutting spending on prisons and using the savings to fund intensive preschool education would reduce crime. The elasticity of crime with respect to incarceration is taken to be .15.

The Changing Nature of Employment Discrimination Litigation

Two major pieces of employment discrimination legislation were passed in the early 1990s: the 1991 Civil Rights Act and Americans with Disabilities Act. Using some simple regression models, we examine the effects of this legislation on the volume, content and outcomes of employment discrimination cases filed in federal courts. We find, first, that the volume of discrimination cases nearly doubled between 1992 and 1997, in contrast to a 10 percent decline during the previous 8 years, and despite a sharply falling unemployment rate that–in the past–would have substantially reduced the amount of litigation. We also observe a significant shift in the composition of suits filed, with race and age discrimination cases declining substantially as a share of the total and sex and disability discrimination cases increasing. We tie these developments, as well as changes in the relationship between plaintiff win rates and the business cycle, to changes in the law that diminish the importance of back-pay damages. We conclude by tentatively suggesting how the meaning of and protection afforded by employment discrimination law has changed over the past 35 years. Yale Law School, j.donohue@yale.edu Univ. of Connecticut Law School, psiegelm@law.uconn.edu. This work was completed while Donohue was at Stanford Law School and Siegelman was at Fordham Law School. We benefitted from helpful comments by seminar participants at UConn. Law School, Fordham Law School, the American Bar Foundation, and conference participants at the American Law and Economics Association. Thanks to Katie Bilodeau and Jinhui Pan for excellent research assistance.

The Impact of Race on Policing and Arrests

Race has long been recognized as playing a critical role in policing. In spite of this awareness, there has been little previous research that attempts to quantitatively analyze the impact of officer race on tangible outcomes. In this paper, we examine the relationship between the racial composition of a city’s police force and the racial patterns of arrests. Increases in the number of minority police are associated with significant increases in arrests of whites but have little impact on arrests of nonwhites. Similarly, more white police increase the number of arrests of nonwhites but do not systematically affect the number of white arrests. These patterns are particularly striking for minor offenses. Understanding the reasons for this empirical regularity and the consequent impact on crime is an important subject for future research.

The Employment Consequences of Wrongful-Discharge Laws: Large, Small, or None at All?

Uniquely in the industrialized world, the United States has long had the presumption that employers may legally fire workers “at will,” that is, “for good cause, bad cause, or no cause at all.” During the 1970’s and 1980’s, this presumption eroded rapidly: most U.S. state courts created three classes of common-law restrictions that limited employers’ ability to fire. These exceptions garnered media headlines, created costly litigation, and perhaps as importantly, generated substantial uncertainty among employers about when they could terminate workers with impunity. We refer to these common-law exceptions as wrongful-discharge laws. Briefly summarized: the “public policy” exception prevents employee discharges that would thwart an important public policy, for example, performing jury duty, filing a worker’s compensation claim, reporting an employer’s wrongdoing, or refusing to commit perjury. The “good faith” exception prohibits employers from firing workers to deprive them of earned benefits, such as sales commissions or pension bonuses. The “implied contract” exception makes informal employer assurances of ongoing employment, such as those found in personnel manuals or promotion letters, legally enforceable. Under the implied-contract exception, an employer implicitly offering ongoing employment can only terminate a worker for good cause. Understanding the economic consequences of these doctrines is essential to an evaluation of the costs of using litigation to protect “employment rights.” Fortunately for empirical analysis, states vary greatly in the timing and extent of adoption of wrongful-discharge laws. Most state courts have adopted at least one wrongfuldischarge law in the last three decades. Three states (Florida, Georgia, and Rhode Island) have never adopted an exception, while 10 states recognize all three exceptions. One may potentially use this cross-state, over-time variation to analyze how wrongful-discharge laws affected employment and earnings in state labor markets. We are not the first authors to recognize this opportunity. In an influential paper, James N. Dertouzos and Lynn A. Karoly (1992; DK hereafter) estimated that the adoption of wrongfuldischarge laws was economically equivalent to a 10-percent employer-side tax on wages, leading to a 3-percent reduction in aggregate employment, in states that allow workers to sue for punitive (“tort”) damages for wrongful discharge, as is typically true under the good-faith and public-policy exceptions. Moreover, DK found that states that adopted a doctrine under which plaintiffs may sue only for economic (“contract”) losses (typically the implied-contract † Discussants: Henry Farber, Princeton University; Joshua Angrist, Massachusetts Institute of Technology; Richard Thaler, University of Chicago.

Studying the Iceberg From Its Tip: A Comparison of Published and Unpublished Employment Discrimination Cases

Researchers often rely on published opinions to draw conclusions about cases decided by the courts, determinants of court decisions, and broader social phenomena. We demonstrate that 80 to 90 percent of employment discrimination cases filed in federal court do not produce a published opinion. There are good theoretical reasons to believe that the process generating a published opinion is not random and thus that samples of published cases will not be representative of all cases. Through a direct comparison of published and unpublished cases, we show that the two actually do differ in significant and predictable ways. Examining several studies that use cases with published opinions for a variety of purposes, we show how our understanding of the operation of employment discrimination law changes-in some instances, dramatically-when we look at all cases, whether or not they have published opinions.

The Death Penalty: No Evidence for Deterrence

John Donohue and Justin Wolfers argue that Gary Becker and Richard Posner are wrong to think that the death penalty deters murder: they find little empirical support for the claim. If anything, when one looks over the longest period possible (1934-2000) there is more evidence that the death penalty stimulates murder than that it deters murder.

Employment Discrimination Law in Perspective: Three Concepts of Equality

Over the past fifty years, the body of law prohibiting discrimination in employment has grown enormously in terms of the extent of geographic coverage, the range of covered employers, the array of protected workers, and the spectrum of prohibited practices. Beginning in the mid-1940s, states began passing Fair Employment Practices laws that generally prohibited discrimination on the basis of race, color, religion, or national origin. Over the next two decades, the geographic reach of these laws spread as most states outside the South enacted some form of this legislation. With the passage of Title VII of the Civil Rights Act of 1964,1 the legal prohibition became national in scope and the categories of protected workers were extended to include women. In successive years, more employers came within the regulatory domain of Title VII as the required number of workers in a covered firm dropped from one hundred to fifteen,2 and in 1972 Congress extended the reach of the law to state and local government and educational institutions.3 Then, in the mid-1970s, the prohibition against racial discrimination was extended to all employers through the Supreme Courts decision in Runyon v. McCrary,4 which interpreted the century-old 42 U.S.C. ? 1981 as providing a remedy for racial discrimination that was independent of Title VII and therefore not bound by the latters exemption of small employers.

Did Miranda Diminish Police Effectiveness

This paper examines the claims of Paul Cassell and Richard Fowles, who argue on the basis of a multiple regression analysis of the time series of national clearance rates, that the Supreme Courts Miranda decision has impaired police effectiveness. The paper notes that, although the raw clearance rates published by the FBI seem to have fallen sharply at about the time of the 1966 decision, it is difficult to tell how much of this result reflects changes in the reporting conduct of police departments and, if real, how much is the product of forces other than the Supreme Courts decision that are not well captured in the gross statistical model. The paper notes that clearance rates are not the best measure of the impact of Miranda since the decision only mandates the police to inform individuals of their rights when they are taken into custody, which is when the police consider a case to be cleared. Thus, any impact that Cassell and Fowles find is likely either to be spurious or to represent a reduction in clearances of crimes other than the one for which the recitation of rights is being offered.

The Evolution of Employment Discrimination Law in the 1990s: A Preliminary Empirical Investigation

Two major pieces of employment discrimination legislation were passed in the early 1990s: the 1991 Civil Rights Act and Americans with Disabilities Act. Using some simple regression models, we examine the effects of this legislation on the volume, content, and outcomes of employment discrimination cases filed in federal courts. We find, first, that the volume of discrimination cases nearly doubled between 1992 and 1997, in contrast to a 10% decline during the previous 8 years, and despite a sharply falling unemployment rate that—in the past—would have substantially reduced the amount of litigation. We also observe a significant shift in the composition of suits filed, with race and age discrimination cases declining substantially as a share of the total and sex and disability discrimination cases increasing. We tie these developments, as well as changes in the relationship between plaintiff win rates and the business cycle, to changes in the law that diminish the importance of back-pay damages. We conclude by tentatively suggesting how the meaning of and protection afforded by employment discrimination law have changed over the past 35 years.

LAW AND ECONOMICS: THE ROAD NOT TAKEN

Since both law and society and law and economics apply social science concepts and methods to the problems of the legal system, one might think that the two disciplines are natural allies. Indeed, with the largely empirical focus of law and society and the strong emphasis on theory in law and economics, the benefits from collaboration between the two would seem to be particularly great. Perhaps surprisingly, though, they have often been at odds with one another, with both groups willing to concede only grudgingly that the other has made useful contributions to the study of legal and public policy issues. The hostility is reflected in the fact that, at recent law and society meetings, very few devotees of law and economics have been in attendance, either as speakers or as members of the audience. What then can explain this chill?