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Job Market Signaling through Occupational Licensing

Peter Blair and Bobby Chung
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Bobby Chung: Clemson University

No 2017-50, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: Among men, the black-white wage gap is as large today as it was in 1950. We test whether the black-white wage gap is due to asymmetric information using newly collected data on occupational licensing laws that ban workers with criminal records. We find evidence supporting this hypothesis. The licensing premiums for black men are largest in licensed occupations that restrict felons —particularly in states with Banthe-Box laws and at small firms. In these contexts where a worker’s criminal history is difficult to infer, we find that occupational licensing reduces asymmetric information and reduces the racial wage gap.

Keywords: wage inequality; tatistical discrimination; screening; signaling; asymmetric information (search for similar items in EconPapers)
JEL-codes: D84 J15 J24 J31 J44 J70 K23 K31 L51 (search for similar items in EconPapers)
Date: 2017-06
New Economics Papers: this item is included in nep-bec, nep-gen, nep-hme, nep-hrm, nep-law and nep-lma
Note: MIP
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Citations: View citations in EconPapers (9) Track citations by RSS feed

Downloads: (external link)
http://humcap.uchicago.edu/RePEc/hka/wpaper/Blair_ ... racial_wage_gaps.pdf First version, May 15, 2017 (application/pdf)
http://humcap.uchicago.edu/RePEc/hka/wpaper/Blair_ ... ial_wage_gaps_r1.pdf Second version, October 17, 2017 (application/pdf)
http://humcap.uchicago.edu/RePEc/hka/wpaper/Blair_ ... ial_wage_gaps_r2.pdf Third version, June 27, 2018 (application/pdf)
http://humcap.uchicago.edu/RePEc/hka/wpaper/Blair_ ... ial_wage_gaps_r3.pdf Third version, June 27, 2018 (application/pdf)

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Working Paper: Job Market Signaling through Occupational Licensing (2018) Downloads
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