According to human capital theory, earnings and specific hires are primarily a function of personal endowment as limited by the mechanics of the job search and employers' discrimination. Thus, the prescription to reduce unemployment is more education and training, improved job placement systems, and elimination of discrimination. This theory also assumes that ex-felons have little to offer employers and that their record is simply one problem among many. However, conservative estimates show that persons with arrest or conviction records for offenses more serious than minor traffic violations constitute between one-fifth and one-third of the adult population and work force. Studies also demonstrated that a criminal record is a major impediment to suitable employment. It now becomes clear that a better understanding of the factors influencing employers' decisions is needed. This area has been slighted by institutions and Government because of employment and training policymakers' lack of knowledge about the criminal justice system, a traditional public and political neglect of the corrections system, and little attention given small employers' personnel policies. The basis for a new policy would be a full understanding of the risks employers take in hiring persons with criminal records and recognition that many ex-felons in the labor force are underemployed. The paper suggests specific research projects that the Department of Labor and other interests should undertake, such as surveys of unemployment and underemployment among ex-offenders and analyses of regulations controlling access to criminal histories for non-law-enforcement purposes. The paper includes four footnotes.