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The Effects of Occupational Licensing Evidence from Detailed Business-Level Data

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  • Marek Zapletal

Abstract

Occupational licensing regulation has increased dramatically in importance over the last several decades, currently affecting more than one thousand occupations in the United States. I use confidential U.S. Census Bureau micro-data to study the relationship between occupational licensing and key business outcomes, such as number of practitioners, prices for consumers, and practitioners’ entry and exit rates. The paper sheds light on the effect of occupational licensing on industry dynamics and intensity of competition, and is the first to study the effects on providers of required occupational training. I find that occupational licensing regulation does not affect the equilibrium number of practitioners or prices of services to consumers, but reduces significantly practitioner entry and exit rates. I further find that providers of occupational licensing training, namely, schools, are larger and seem to do better, in terms of revenues and gross margins, in states with more stringent occupational licensing regulation.

Suggested Citation

  • Marek Zapletal, 2017. "The Effects of Occupational Licensing Evidence from Detailed Business-Level Data," Working Papers 17-20, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:17-20
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    File URL: https://www2.census.gov/ces/wp/2017/CES-WP-17-20.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Morikawa, Masayuki, 2018. "Occupational licenses and labor market outcomes in Japan," Japan and the World Economy, Elsevier, vol. 48(C), pages 45-56.
    2. Saucedo, Eduardo & Ozuna, Teofilo jr. & Zamora, Hector, 2020. "The effect of FDI on low and high-skilled employment and wages in Mexico : a study for the manufacture and service sectors," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 54(1), pages 1-17.
    3. Fredriksen, Kaja, 2020. "Does occupational licensing impact incomes? : A replication study for the German crafts case," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 54(1), pages .8(1-17).
    4. repec:iab:iabjlr:v:54:i:1:p:art.9 is not listed on IDEAS
    5. Fredriksen, Kaja, 2020. "Does occupational licensing impact incomes? : A replication study for the German crafts case," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 54(1), pages 1-8.
    6. Saucedo, Eduardo & Ozuna, Teofilo jr. & Zamora, Hector, 2020. "The effect of FDI on low and high-skilled employment and wages in Mexico : a study for the manufacture and service sectors," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 54(1), pages 1-9.
    7. repec:iab:iabjlr:v:54:i:1:p:art.8 is not listed on IDEAS
    8. Saucedo, Eduardo & Ozuna, Teofilo jr. & Zamora, Hector, 2020. "The effect of FDI on low and high-skilled employment and wages in Mexico : a study for the manufacture and service sectors," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 54(1), pages .9(1-17).
    9. MORIKAWA Masayuki, 2017. "Occupational Licenses and Labor Market Outcomes," Discussion papers 17078, Research Institute of Economy, Trade and Industry (RIETI).
    10. Kaja Fredriksen, 2020. "Does occupational licensing impact incomes? A replication study for the German crafts case," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 54(1), pages 1-17, December.

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