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Occupational Licensing


  • Morris M. Kleiner


The study of the regulation of occupations has a long and distinguished tradition in economics. In this paper, I present the central arguments and unresolved issues involving the costs and benefits of occupational licensing. The main benefits that are suggested for occupational licensing involve improving quality for those persons receiving the service. In contrast, the costs attributed to this labor market institution are that it restricts the supply of labor to the occupation and thereby drives up the price of labor as well as of services rendered. Alternative public policies for this institution are identified.

Suggested Citation

  • Morris M. Kleiner, 2000. "Occupational Licensing," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 189-202, Fall.
  • Handle: RePEc:aea:jecper:v:14:y:2000:i:4:p:189-202 Note: DOI: 10.1257/jep.14.4.189

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    References listed on IDEAS

    1. Timothy R. Muzondo & Bohumir Pazderka, 1980. "Occupational Licensing and Professional Incomes in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 13(4), pages 659-667, November.
    2. Kleiner, Morris M & Kudrle, Robert T, 2000. "Does Regulation Affect Economic Outcomes? The Case of Dentistry," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 547-582, October.
    3. Maurizi, Alex, 1974. "Occupational Licensing and the Public Interest," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 399-413, Part I, M.
    4. Perloff, Jeffrey M, 1980. "The Impact of Licensing Laws on Wage Changes in the Construction Industry," Journal of Law and Economics, University of Chicago Press, vol. 23(2), pages 409-428, October.
    5. Freeman, Richard B & Kleiner, Morris M, 1990. "The Impact of New Unionization on Wages and Working Conditions," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 8-25, January.
    6. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
    7. Alan B. Krueger, 1999. "From Bismarck to Maastricht: The March to European Union and the Labor Compact," Working Papers 803, Princeton University, Department of Economics, Industrial Relations Section..
    8. Carl Shapiro, 1986. "Investment, Moral Hazard, and Occupational Licensing," Review of Economic Studies, Oxford University Press, vol. 53(5), pages 843-862.
    9. Robert J. Thornton & Andrew R. Weintraub, 1979. "Licensing in the Barbering Profession," ILR Review, Cornell University, ILR School, vol. 32(2), pages 242-249, January.
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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations


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