Occupational Licensing in the European Union: Coverage and Wage Effects

Maria Koumenta and Mario Pagliero

No 525, Carlo Alberto Notebooks from Collegio Carlo Alberto

Abstract: We present the first EU-wide study on the prevalence and labour market impact of occupational regulation in the EU. Drawing on a new EU Survey of Regulated Occupations, we find that licensing affects about 22 percent of workers in the EU, although there is significant variability across member states and occupations. On average, licensing is associated with a 4 percent higher hourly wages. Using decomposition techniques we show that rent capture accounts for one third of this effect and the remaining is attributed to signalling. We find considerable heterogeneity in the wage gains by occupation and level of educational attainment. Finally, occupational licensing increases wage inequality. After accounting for composition effects, licensing increases the standard deviation of wages by about 0.02 log points.

Keywords: Occupational regulation; licensing; wages. (search for similar items in EconPapers)
JEL-codes: J31 J44 (search for similar items in EconPapers)
Pages: pages 45
Date: 2017
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Related works:
Working Paper: Occupational Licensing in the European Union: Coverage and Wage Effects (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:cca:wpaper:525

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