Millions of drivers have had their licenses suspended for unpaid traffic, toll, misdemeanor and felony fines and fees, often impacting their ability to earn. In this study, researchers looked at 24 separate debt-based drivers licenses suspension reforms enacted across the United States between 2016 and 2023 to assess whether the reforms had a measurable impact on employment rates in those states. They also explored the level of the reform, comparing states that ended debt-based driving restrictions for failure to pay (FTP) fines and fees, failure to appear (FTA) at a court hearing, or both, and whether the reforms were retroactive, included automatic reinstatement, or eliminated other barriers to reinstatement. The study suggests that debt-based license suspension reform can have a meaningful positive effect on statewide employment rates. However, the extent of effectiveness of such reforms depends on their scope and comprehensiveness, and how well they are implemented.
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Key Findings:
- Limited state reforms show no significant effect on employment.
- Reforms that are more comprehensive are associated with a 2.2 percent relative gain over the mean employment rate, with the impact growing steadily over two-and-a- half years following implementation.
- Comprehensive FTP reform was followed by stronger employment gains, whereas partial FTP and FTA (whether partial or full) reforms had no employment impact.
- Reforms that eliminate administrative burdens by making reinstatement automatic or that retroactively reinstate licenses yielded more employment benefits.
- Omnibus reforms had an employment impact, whereas single-issue bills did not.
- Any level of reform – comprehensive or limited – was found to have a measurable effect on employment rates (an increase of nearly 2 percentage points) for non-white drivers.