Estimating Earnings Impact of Driver’s License Revocations in North Carolina

In North Carolina, driver’s licenses are revoked for failure to appear in court (FTA) and failure to pay court-ordered monetary obligations (FTP).

Not having a valid driver’s license is at best an inconvenience—relying on others to drive to get groceries—but at worst can have a major impact on life—losing a job that requires driving.

To get a handle on the consequences of losing a license, we were asked to provide a high-level estimate of the earnings impact of revocations due to FTP or FTA.

The result? We found that the statewide estimated earnings loss in 2024 dollars one year after revocation is between $6.5 and $8.8 billion (Figure 1).

The North Carolina Department of Motor Vehicles (NC DMV) reports that as of December 31, 2020, 996,000 people had active driver’s license revocations for FTA and FTP. These revocations occurred over time. To estimate earnings impact, we assume that about half of those people—500,000—were working at the time of the revocation and earning the North Carolina median wage ($42,095/year). Based on other research, we made two additional assumptions to assess the impact of revocation on earnings one year later. First, that 9% to 12% of people lost their jobs and were unemployed. And second, that those who were employed experienced an earnings reduction of 24% to 43%.

Even if we reduce the median wage to $30,000/year—to account for the fact that people with an FTA or FTP may earn less than the statewide median wage—the estimated earnings impact is between $4.6 and $6.3 billion.

Figure 1. Estimated earnings impact of revoking driver’s licenses for FTA and FTP

For details about how we computed this estimate, see the notes to our briefing paper here.


What Do We Know About Violent Crime Trends in North Carolina?

Crime statistics are compelling reading. When federal agencies release new estimates of the national crime rate, the news media pounce. The crime rate, its causes, and how to address crime are being hotly debated. Violent crime in particular prompts concern about public safety and the appropriate policy response.

So, what do the data tell us about trends in violent crime in North Carolina?

Where the data come from and what they can and can’t tell us about crime

There are three main sources of crime data in North Carolina: police data, court data, and victim surveys (Figure 1).

This post focuses on the first two data sets: police and court data. Although the victim survey data (from the annual National Crime Victimization Survey) provide estimates for both the nation and North Carolina, they are challenging to use and an in-depth discussion requires more than a single blog post.

Read more