IDEAS home Printed from https://ideas.repec.org/p/hka/wpaper/2018-092.html
   My bibliography  Save this paper

How Much of Barrier to Entry is Occupational Licensing?

Author

Listed:
  • Peter Blair

    (Clemson University)

  • Bobby Chung

    (Clemson University)

Abstract

We exploit state variation in licensing laws to study the effect of licensing on occupational choice using a boundary discontinuity design. We find that licensing reduces equilibrium labor supply by an average of 17%-27%. The negative labor supply effects of licensing appear to be strongest for white workers and comparatively weaker for black workers.

Suggested Citation

  • Peter Blair & Bobby Chung, 2018. "How Much of Barrier to Entry is Occupational Licensing?," Working Papers 2018-092, Human Capital and Economic Opportunity Working Group.
  • Handle: RePEc:hka:wpaper:2018-092
    Note: MIP
    as

    Download full text from publisher

    File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Blair_Chung_2018_barrier-entry-occupational-licensing.pdf
    File Function: First version, December 12, 2018
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Sandra E. Black, 1999. "Do Better Schools Matter? Parental Valuation of Elementary Education," The Quarterly Journal of Economics, Oxford University Press, vol. 114(2), pages 577-599.
    2. Peter Blair & Bobby Chung, 2017. "Job Market Signaling through Occupational Licensing," Working Papers 2017-50, Human Capital and Economic Opportunity Working Group.
    3. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," Journal of Political Economy, University of Chicago Press, vol. 115(4), pages 588-638, August.
    4. 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.
    5. Mario Pagliero, 2010. "Licensing Exam Difficulty and Entry Salaries in the US Market for Lawyers," British Journal of Industrial Relations, London School of Economics, vol. 48(4), pages 726-739, December.
    6. Morris M. Kleiner, 2006. "Licensing Occupations: Ensuring Quality or Restricting Competition?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number lo, September.
    7. Maury Gittleman & Morris M. Kleiner, 2016. "Wage Effects of Unionization and Occupational Licensing Coverage in the United States," ILR Review, Cornell University, ILR School, vol. 69(1), pages 142-172, January.
    8. 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.
    9. Morris M. Kleiner & Kyoung Won Park, 2010. "Battles Among Licensed Occupations: Analyzing Government Regulations on Labor Market Outcomes for Dentists and Hygienists," NBER Working Papers 16560, National Bureau of Economic Research, Inc.
    10. 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.
    11. Robert J. Thornton & Edward J. Timmons, 2013. "Licensing One of the World's Oldest Professions: Massage," Journal of Law and Economics, University of Chicago Press, vol. 56(2), pages 371-388.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Morris M. Kleiner & Edward J. Timmons, 2020. "Occupational Licensing: Improving Access to Regulatory Information," Journal of Labor Research, Springer, vol. 41(4), pages 333-337, December.
    2. Morris M. Kleiner & Evan J. Soltas, 2019. "A Welfare Analysis of Occupational Licensing in U.S. States," NBER Working Papers 26383, National Bureau of Economic Research, Inc.
    3. Morris M. Kleiner & Evan J. Soltas, 2019. "A Welfare Analysis of Occupational Licensing in U.S. States," Staff Report 590, Federal Reserve Bank of Minneapolis.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Peter Q. Blair & Bobby W. Chung, 2019. "How Much of Barrier to Entry is Occupational Licensing?," British Journal of Industrial Relations, London School of Economics, vol. 57(4), pages 919-943, December.
    2. Mario Pagliero, 2019. "Occupational Licensing in the EU: Protecting Consumers or Limiting Competition?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 55(1), pages 137-153, August.
    3. 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.
    4. Pizzola, Brandon & Tabarrok, Alexander, 2017. "Occupational licensing causes a wage premium: Evidence from a natural experiment in Colorado’s funeral services industry," International Review of Law and Economics, Elsevier, vol. 50(C), pages 50-59.
    5. Peter Blair & Bobby Chung, 2017. "Job Market Signaling through Occupational Licensing," Working Papers 2017-50, Human Capital and Economic Opportunity Working Group.
    6. MORIKAWA Masayuki, 2017. "Occupational Licenses and Labor Market Outcomes," Discussion papers 17078, Research Institute of Economy, Trade and Industry (RIETI).
    7. Wei Chi & Morris M. Kleiner & Xiaoye Qian, 2017. "Do Occupational Regulations Increase Earnings? Evidence from China," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(2), pages 351-381, April.
    8. Suyoun Han & Morris M. Kleiner, 2017. "Analyzing the Influence of Occupational Licensing Duration and Grandfathering on Labor Market Outcomes," Staff Report 556, Federal Reserve Bank of Minneapolis.
    9. Morikawa, Masayuki, 2018. "Occupational licenses and labor market outcomes in Japan," Japan and the World Economy, Elsevier, vol. 48(C), pages 45-56.
    10. Herbert Brücker & Albrecht Glitz & Adrian Lerche & Agnese Romiti, 2021. "Occupational Recognition and Immigrant Labor Market Outcomes," Journal of Labor Economics, University of Chicago Press, vol. 39(2), pages 497-525.
    11. Kim Jeounghee & Chatterji Sangeeta, 2020. "Gender and Educational Variations in the Earnings Premiums of Occupational Credentials," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 20(3), pages 1-21, July.
    12. Tingting Zhang & Morley Gunderson, 2020. "Impact of Occupational Licensing on Wages and Wage Inequality: Canadian Evidence 1998–2018," Journal of Labor Research, Springer, vol. 41(4), pages 338-351, December.
    13. Christina DePasquale & Kevin Stange, 2016. "Labor Supply Effects of Occupational Regulation: Evidence from the Nurse Licensure Compact," NBER Working Papers 22344, National Bureau of Economic Research, Inc.
    14. Daniel J. Smith & Noah J. Trudeau, 2019. "The Undertaker’s Cut: Challenging the Rational Basis for Casket Licensure," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 34(Summer 20), pages 23-41.
    15. Pagliero, Mario, 2013. "The impact of potential labor supply on licensing exam difficulty," Labour Economics, Elsevier, vol. 25(C), pages 141-152.
    16. 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.
    17. Morris M. Kleiner, 2017. "The influence of occupational licensing and regulation," IZA World of Labor, Institute of Labor Economics (IZA), pages 392-392, October.
    18. Marc T. Law & Mindy S. Marks, 2017. "The Labor-Market Effects of Occupational Licensing Laws in Nursing," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(4), pages 640-661, October.
    19. 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.
    20. Bradley T. Shapiro, 2020. "Advertising in Health Insurance Markets," Marketing Science, INFORMS, vol. 39(3), pages 587-611, May.

    More about this item

    Keywords

    occupational licensing; Labor Supply; race; gender;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hka:wpaper:2018-092. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/mfichus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jennifer Pachon (email available below). General contact details of provider: https://edirc.repec.org/data/mfichus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.