 Occupational licensing causes a wage premium: Evidence from a natural experiment in Colorado’s funeral services industryBrandon Pizzola and Alexander Tabarrok International Review of Law and Economics, 2017, vol. 50, issue C, 50-59 Abstract: We study the effect of occupational licensing on wages in the funeral services industry using a rare natural experiment. In 1983, Colorado delicensed funeral services. Using difference-in-differences, difference-in-difference-in-differences, and synthetic control specifications, we compare wages in Colorado’s funeral services industry to wages in the US funeral services industry. Overall, the results from difference-in-differences, difference-in-difference-in-differences, and synthetic control specifications suggest occupational licensing causes a wage premium of 11–12%. We find similar results from a standard cross-sectional wage regression using data on individuals in 1990. Thus, this suggests that cross-sectional regressions of wages on occupational licensing in other industries are a good baseline estimate of a causal effect. We also find that licensing increases prices and appears to push consumers away from cremation and towards more expensive burial procedures. Date: 2017 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:irlaec:v:50:y:2017:i:c:p:50-59 DOI: 10.1016/j.irle.2017.04.005 Access Statistics for this article International Review of Law and Economics is currently edited by C. Ott, A. W. Katz and H-B. Schäfer More articles in International Review of Law and Economics from Elsevier |
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