Licensure as a Credential: Evidence on Unemployment Protection and Inequality from the Great Recession and COVID-19

Peter Q. Blair and Bobby (Wing Yin) Chung

No 32486, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Recent research shows that education shields workers from job loss in recessions. We test whether occupational licensing, another widespread credential, provides similar unemployment protection during recessions. Using individual-level licensing data and supplemental state-occupation measures, we study both the Great Recession and the COVID-19 recession. Licensed workers experienced a 0.8-1 percentage point (27%) smaller increase in unemployment than comparable unlicensed workers in both downturns. Ignoring these unemployment effects understates inequality between licensed and unlicensed workers by 3–7%. Our findings suggest that, like education, licensing not only raises wages but also protects jobs, thereby amplifying inequality during economic downturns.

JEL-codes: E02 E24 J08 J23 J24 J44 J64 K31 L31 M51 (search for similar items in EconPapers)
Date: 2024-05
New Economics Papers: this item is included in nep-hea, nep-law and nep-lma
Note: DAE ED IFM LE LS
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