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Effects of Occupational Licensing Laws on Minorities: Evidence from the Progressive Era

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  • Marc T. Law
  • Mindy S. Marks

Abstract

This paper investigates the effect of occupational licensing regulation on the representation of minority workers in a range of skilled and semiskilled occupations. We take advantage of a quasi experiment afforded by the introduction of state-level licensing regulation during the late nineteenth and mid-twentieth centuries to identify the effects of licensing on female and black workers. We find that licensing laws seldom harmed minority workers. In fact, licensing often helped minorities, particularly in occupations for which information about worker quality was difficult to ascertain. (c) 2009 by The University of Chicago. All rights reserved.

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  • 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, May.
  • Handle: RePEc:ucp:jlawec:v:52:y:2009:i:2:p:351-366
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    References listed on IDEAS

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    1. Robert A. Margo, 1990. "Race and Schooling in the South, 1880-1950: An Economic History," NBER Books, National Bureau of Economic Research, Inc, number marg90-1, Marzo.
    2. Heywood, John S & Peoples, James H, Jr, 1994. "Deregulation and the Prevalence of Black Truck Drivers," Journal of Law and Economics, University of Chicago Press, vol. 37(1), pages 133-155, April.
    3. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
    4. Donald Dewey, 1952. "Negro Employment in Southern Industry," Journal of Political Economy, University of Chicago Press, vol. 60, pages 279-279.
    5. Law, Marc T. & Kim, Sukkoo, 2005. "Specialization and Regulation: The Rise of Professionals and the Emergence of Occupational Licensing Regulation," The Journal of Economic History, Cambridge University Press, vol. 65(03), pages 723-756, September.
    6. 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 1328-1346, December.
    7. Fishback, Price, 1984. "Segregation in Job Hierarchies: West Virginia Coal Mining, 1906–1932," The Journal of Economic History, Cambridge University Press, vol. 44(03), pages 755-774, September.
    8. Morris M. Kleiner, 2006. "Licensing Occupations: Ensuring Quality or Restricting Competition?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number lo.
    9. Sundstrom, William A., 1994. "The Color Line: Racial Norms and Discrimination in Urban Labor Markets, 1910–1950," The Journal of Economic History, Cambridge University Press, vol. 54(02), pages 382-396, June.
    10. Coate, Stephen & Loury, Glenn C, 1993. "Will Affirmative-Action Policies Eliminate Negative Stereotypes?," American Economic Review, American Economic Association, vol. 83(5), pages 1220-1240, December.
    11. 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.
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    Cited by:

    1. repec:eee:japwor:v:48:y:2018:i:c:p:45-56 is not listed on IDEAS
    2. Suyoun Han & Morris M. Kleiner, 2016. "Analyzing the Influence of Occupational Licensing Duration and Grandfathering on Labor Market Outcomes," NBER Working Papers 22810, National Bureau of Economic Research, Inc.
    3. Mario Pagliero & Edward Timmons, 2012. "Occupational Regulation in the European Legal Market," Working papers 27, Former Department of Economics and Public Finance "G. Prato", University of Torino.
    4. Price V. Fishback & Rebecca Holmes & Samuel Allen, 2008. "Lifting the Curse of Dimensionality: Measures of the Labor Legislation Climate in the States During the Progressive Era," NBER Working Papers 14167, National Bureau of Economic Research, Inc.
    5. Pagliero, Mario, 2013. "The impact of potential labor supply on licensing exam difficulty," Labour Economics, Elsevier, vol. 25(C), pages 141-152.
    6. Fredriksen, Kaja & Runst, Petrik, 2018. "Are estimates of the "natural experiment" in the German crafts sector causal?," ifh Working Papers 16/2018, Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh).
    7. repec:bla:indres:v:56:y:2017:i:4:p:640-661 is not listed on IDEAS
    8. repec:bla:ecinqu:v:56:y:2018:i:2:p:1261-1277 is not listed on IDEAS
    9. repec:kap:ejlwec:v:45:y:2018:i:3:d:10.1007_s10657-018-9583-x is not listed on IDEAS
    10. Kleiner, Morris M. & Han, Suyoun, 2017. "Analyzing the Influence of Occupational Licensing Duration and Grandfathering on Labor Market Outcomes," Staff Report 556, Federal Reserve Bank of Minneapolis.
    11. repec:bla:indres:v:57:y:2018:i:1:p:57-100 is not listed on IDEAS
    12. Peter Blair & Bobby Chung, 2017. "Job Market Signaling through Occupational Licensing," Working Papers 2017-50, Human Capital and Economic Opportunity Working Group.
    13. Daniel Carpenter, 2014. "Accounting for Financial Innovation and Borrower Confidence in Financial Rule Making: Analogies from Health Policy," The Journal of Legal Studies, University of Chicago Press, vol. 43(S2), pages 331-349.
    14. Peter Q. Blair & Bobby W. Chung, 2018. "How Much of Barrier to Entry is Occupational Licensing?," NBER Working Papers 25262, National Bureau of Economic Research, Inc.
    15. Joseph P. Kaboski & Trevon D. Logan, 2011. "Factor Endowments and the Returns to Skill: New Evidence from the American Past," Journal of Human Capital, University of Chicago Press, vol. 5(2), pages 111-152.
    16. Maury Gittleman & Mark A. Klee & Morris M. Kleiner, 2018. "Analyzing the Labor Market Outcomes of Occupational Licensing," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 57(1), pages 57-100, January.
    17. Matthew Chesnes & Weijia (Daisy) Dai & Ginger Zhe Jin, 2014. "Banning Foreign Pharmacies from Sponsored Search: The Online Consumer Response," NBER Working Papers 20088, National Bureau of Economic Research, Inc.
    18. Alison Cathles & David E. Harrington & Kathy Krynski, 2010. "The Gender Gap in Funeral Directors: Burying Women with Ready‐to‐Embalm Laws?," British Journal of Industrial Relations, London School of Economics, vol. 48(4), pages 688-705, December.
    19. Marc T. Law & Mindy S. Marks, 2012. "Occupational Licensing and Minorities: A Reply to Klein, Powell, and Vorotnikov," Econ Journal Watch, Econ Journal Watch, vol. 9(3), pages 234-255, September.
    20. MORIKAWA Masayuki, 2017. "Occupational Licenses and Labor Market Outcomes," Discussion papers 17078, Research Institute of Economy, Trade and Industry (RIETI).
    21. Mario Pagliero & Edward Timmons, 2013. "Occupational Regulation in the European Legal Market," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 10(2), pages 243-265, August.
    22. Daniel B. Klein & Benjamin Powell & Evgeny S. Vorotnikov, 2012. "Was Occupational Licensing Good for Minorities? A Critique of Marc Law and Mindy Marks," Econ Journal Watch, Econ Journal Watch, vol. 9(3), pages 210-233, September.

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