Bailing out the Unemployment Rate: The Impact of Cash Bail Reform on Unemployment

This study seeks to discern the relationship between New Jersey's monetary bail reform implemented on January 1st, 2017 and their unemployment rate. The Criminal Justice Reform Act changed New Jersey's pretrial policies to essentially eliminate the use of monetary bail and instead favor risk-based assessments when deciding whether a defendant should be jailed before trial. To find the impact of this reform, a differences-in-differences linear regression is performed using panel data on the county level. This study utilizes variables that have explanatory power regarding the unemployment rate to further isolate the effect of bail reform on the unemployment rate. The results find that the presence of New Jersey's bail reform has a significant impact on the unemployment rate, decreasing the unemployment rate by .65%, which is approximately 10% of New Jersey's average unemployment rate.