Final answer:
Yes, employment screening services that provide data on a candidate's credit history, driving record, and workers' compensation claims are beneficial in the hiring process to alleviate asymmetric information issues. Academic accomplishments and references are also used to pre-screen candidates for desirable attributes. Employers must be careful to follow anti-discrimination laws governed by the EEOC in their hiring practices.
Step-by-step explanation:
The statement that employment screening services are useful in the selection process because they have access to a job applicant's credit history, driving record, and workers' compensation claims history is true. Such services provide employers with additional data to assess the potential risks and reliability of job applicants, helping to mitigate the issues of asymmetric information in the labor market. Access to an applicant's past behavior in financial matters, driving habits, and previous claims can signal responsibility and reliability, which are important factors for employers when making hiring decisions.
Employers also look for academic achievements, such as graduation from respected institutions, high grade point averages, and accolades, as these can act as a proxy for characteristics like hard work, perseverance, and ability. In addition, they may require references to gain insights into attributes that are difficult to quantify, such as energy level, work ethic, and the ability to work well with others.
However, it's critical for employers to avoid discriminatory practices. In the United States, there are strict laws against employment discrimination, and decisions must not be based on group membership that is unrelated to job performance. The U.S. Equal Employment Opportunity Commission (EEOC) oversees and enforces these rules.