Analyzing the Extent and Influence of Occupational Licensing on the Labor Market

Morris M. Kleiner () and Alan Krueger
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Morris M. Kleiner: University of Minnesota

No 5505, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This study examines the extent and influence of occupational licensing in the U.S. using a specially designed national labor force survey. Specifically, we provide new ways of measuring occupational licensing and consider what types of regulatory requirements and what level of government oversight contribute to wage gains and variability. Estimates from the survey indicated that 35 percent of employees were either licensed or certified by the government, and that 29 percent were fully licensed. Another 3 percent stated that all who worked in their job would eventually be required to be certified or licensed, bringing the total that are or eventually must be licensed or certified by government to 38 percent. We find that licensing is associated with about 18 percent higher wages, but the effect of governmental certification on pay is much smaller. Licensing by larger political jurisdictions is associated with higher wage gains relative to only local licensing. We find little association between licensing and the variance of wages, in contrast to unions. Overall, our results show that occupational licensing is an important labor market phenomenon that can be measured in labor force surveys.

Keywords: wages and labor market institutions; labor market data; labor market institutions; occupational licensing; wage inequality and labor market institutions (search for similar items in EconPapers)
JEL-codes: J08 J44 J58 J80 K23 K31 L38 L5 L51 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2011-02
New Economics Papers: this item is included in nep-lab and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published - published in: Labor Economics, 2013, 31 (S1, Part 2), S173–S202

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Related works:
Journal Article: Analyzing the Extent and Influence of Occupational Licensing on the Labor Market (2013)
Working Paper: Analyzing the Extent and Influence of Occupational Licensing on the Labor Market (2009)
Working Paper: Analyzing the Extent and Influence of Occupational Licensing on the Labor Market (2009)
Working Paper: Analyzing the Extent and Influence of Occupational Licensing on the Labor Market (2009)
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