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The Prevalence and Effects of Occupational Licensing

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  • Morris M. Kleiner
  • Alan B. Krueger

Abstract

Our study provides the first national analysis of the labour market implications of workers who are licensed by any agency of the government in the USA. Using a specially designed Gallup survey of a nationally representative sample of Americans, we provide an analysis of the influence of this form of occupational regulation. We find that 29 per cent of the workforce is required to hold a licence, which is a higher percentage than that found in other studies that rely on state-level occupational licensing data or single states. Workers who have higher levels of education are more likely to work in jobs that require a licence. Union workers and government employees are more likely to have a licence requirement than are non-union or private sector employees. Our multivariate estimates suggest that licensing has about the same quantitative impact on wages as do unions - that is about 15 per cent - and that being both licensed and in a union can increase wages by more than 24 per cent. However, unlike unions which reduce variance in wages, licensing does not significantly reduce wage dispersion for individuals in licensed jobs. Copyright (c) Blackwell Publishing Ltd/London School of Economics 2010.

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Bibliographic Info

Article provided by London School of Economics in its journal British Journal of Industrial Relations.

Volume (Year): 48 (2010)
Issue (Month): 4 (December)
Pages: 676-687

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Handle: RePEc:bla:brjirl:v:48:y:2010:i:4:p:676-687

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References

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  1. Richard B. Freeman, 1981. "Union Wage Practices and Wage Dispersion within Establishments," NBER Working Papers 0752, National Bureau of Economic Research, Inc.
  2. Shapiro, Carl, 1986. "Investment, Moral Hazard, and Occupational Licensing," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 53(5), pages 843-62, October.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Krueger to CEA
    by Adam Ozimek in Modeled Behavior on 2011-08-29 11:35:20
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Cited by:
  1. Morris M. Kleiner & Richard M. Todd, 2009. "Mortgage Broker Regulations That Matter: Analyzing Earnings, Employment, and Outcomes for Consumers," NBER Chapters, in: Studies of Labor Market Intermediation, pages 183-231 National Bureau of Economic Research, Inc.
  2. Maury Gittleman & Morris M. Kleiner, 2013. "Wage Effects of Unionization and Occupational Licensing Coverage in the United States," Working Papers, U.S. Bureau of Labor Statistics 464, U.S. Bureau of Labor Statistics.
  3. Morris M. Kleiner & Alan B. Krueger, 2013. "Analyzing the Extent and Influence of Occupational Licensing on the Labor Market," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 31(S1), pages S173 - S202.
  4. Kawaguchi, Daiji & Murao, Tetsushi & Kambayashi, Ryo, 2013. "Incidence of Strict Quality Standards: Protection of Consumers or Windfall for Professionals?," IZA Discussion Papers 7443, Institute for the Study of Labor (IZA).
  5. Brenton Peterson & Sonal Pandya & David Leblang, 2014. "Doctors with borders: occupational licensing as an implicit barrier to high skill migration," Public Choice, Springer, Springer, vol. 160(1), pages 45-63, July.
  6. Alan S. Blinder & Alan B. Krueger, 2009. "Alternative Measures of Offshorability: A Survey Approach," Working Papers, Princeton University, Department of Economics, Center for Economic Policy Studies. 1169, Princeton University, Department of Economics, Center for Economic Policy Studies..
  7. Morris M. Kleiner & Richard M. Todd, 2007. "Mortgage Broker Regulations That Matter: Analyzing Earnings, Employment, and Outcomes for Consumers," NBER Working Papers 13684, National Bureau of Economic Research, Inc.
  8. Maheshri, Vikram & Winston, Clifford, 2014. "An exploratory study of the pricing of legal services," International Review of Law and Economics, Elsevier, Elsevier, vol. 38(S), pages 169-173.
  9. Pagliero, Mario, 2013. "The impact of potential labor supply on licensing exam difficulty," Labour Economics, Elsevier, Elsevier, vol. 25(C), pages 141-152.

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