Analyzing the Extent and Influence of Occupational Licensing on the Labor Market
AbstractThis 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 14 percent higher wages, but the effect of governmental certification on pay is much smaller. Licensing by multiple political jurisdictions is associated with the highest wage gains relative to only local licensing. Specific requirements by the government for a worker to enter an occupation, such as education level and long internships, are positively associated with wages. 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.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14979.
Date of creation: May 2009
Date of revision:
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Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
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Other versions of this item:
- Morris M. Kleiner & Alan B. Krueger, 2009. "Analyzing the Extent and Influence of Occupational Licensing on the Labor Market," Working Papers 1165, Princeton University, Department of Economics, Industrial Relations Section..
- Morris M. Kleiner & Alan B. Krueger, 2009. "Analyzing the Extent and Influence of Occupational Licensing on the Labor Market," Working Papers 1178, Princeton University, Department of Economics, Center for Economic Policy Studies..
- J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
- J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
- J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
- J80 - Labor and Demographic Economics - - Labor Standards - - - General
- K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
- K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
- L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy
- L5 - Industrial Organization - - Regulation and Industrial Policy
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-23 (All new papers)
- NEP-BEC-2009-05-23 (Business Economics)
- NEP-LAB-2009-05-23 (Labour Economics)
You can help add them by filling out this form.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Social-Democratic Feudalism and Its Upper Paleolithic Impetus
by Daniel B. Klein in cato unbound on 2010-12-20 19:58:27
- Morris M. Kleiner & Charles Wheelan, 2010. "Occupational Licensing Matters: Wages, Quality and Social Costs," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 8(3), pages 29-33, October.
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