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Was Occupational Licensing Good for Minorities? A Critique of Marc Law and Mindy Marks

  • Daniel B. Klein
  • Benjamin Powell
  • Evgeny S. Vorotnikov

A 2009 Journal of Law and Economics article by Marc T. Law and Mindy S. Marks suggests that during the period 1890-1950 occupational licensing did not tend to affect blacks and women adversely. The biggest problem with the paper is that a Census-reported practitioner in a licensing state is not necessarily licensed—a fact never mentioned by Law and Marks—and yet that fact should greatly affect their treatment of the data and results. Information about plumbers in Maryland reveals that in treating the Census number of black plumbers as licensed black plumbers—as Law and Marks implicitly do—they overstate the actual number by 4700 percent. It is therefore unsurprising that they do not find plumbing licensing to have negatively impacted blacks. The paper suffers from several other problems, as well, including: Law and Marks lump certification in with licensing; there is a sample selection bias in their method for including an occupation in the study; several of their findings are based on extremely low participation by blacks and women; they treat women as the “minority” in the field of nursing. Because of these and other problems, including the results of falsification tests, we judge their conclusions to be highly doubtful.

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Article provided by Econ Journal Watch in its journal Econ Journal Watch.

Volume (Year): 9 (2012)
Issue (Month): 3 (September)
Pages: 210-233

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Handle: RePEc:ejw:journl:v:9:y:2012:i:3:p:210-233
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  1. Marc T. Law & Sukkoo Kim, 2004. "Specialization and Regulation: The Rise of Professionals and the Emergence of Occupational Licensing Regulation," NBER Working Papers 10467, National Bureau of Economic Research, Inc.
  2. Shirley Svorny, 2004. "Licensing Doctors: Do Economists Agree?," Econ Journal Watch, Econ Journal Watch, vol. 1(2), pages 279-305, August.
  3. Pagliero, Mario, 2011. "What is the objective of professional licensing? Evidence from the US market for lawyers," International Journal of Industrial Organization, Elsevier, vol. 29(4), pages 473-483, July.
  4. Marc T. Law & Mindy S. Marks, 2009. "Effects of Occupational Licensing Laws on Minorities: Evidence from the Progressive Era," Journal of Law and Economics, University of Chicago Press, vol. 52(2), pages 351-366, 05.
  5. Klein, Daniel, 2012. "Knowledge and Coordination: A Liberal Interpretation," OUP Catalogue, Oxford University Press, number 9780199794126, March.
  6. David Barker, 2008. "Ethics and Lobbying: The Case of Real Estate Brokerage," Journal of Business Ethics, Springer, vol. 80(1), pages 23-35, June.
  7. Morris M. Kleiner, 2006. "Licensing Occupations: Ensuring Quality or Restricting Competition?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number lo, November.
  8. Leland, Hayne E, 1979. "Quacks, Lemons, and Licensing: A Theory of Minimum Quality Standards," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1328-46, December.
  9. E. Frank Stephenson & Erin E. Wendt, 2009. "Occupational Licensing: Scant Treatment in Labor Texts," Econ Journal Watch, Econ Journal Watch, vol. 6(2), pages 181-194, May.
  10. Maya N. Federman & David E. Harrington & Kathy J. Krynski, 2006. "The Impact of State Licensing Regulations on Low-Skilled Immigrants: The Case of Vietnamese Manicurists," American Economic Review, American Economic Association, vol. 96(2), pages 237-241, May.
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