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Wage Effects of Unionization and Occupational Licensing Coverage in the United States

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Listed author(s):
  • Maury Gittleman
  • Morris M. Kleiner

Abstract

Recent estimates in standard models of wage determination for both unionization and occupational licensing have shown wage effects that are similar across the two institutions. These cross-sectional estimates use specialized data sets, with small sample sizes, for the period 2006 through 2008. Our analysis examines the impact of unions and licensing coverage on wage determination using new data collected on licensing statutes that are then linked to longitudinal data from the National Longitudinal Survey of Youth (NLSY79) from 1979 to 2010. We develop several approaches, using both cross-sectional and longitudinal analyses, to measure the impact of these two labor market institutions on wage determination. Our estimates of the economic returns to union coverage are greater than those for licensing requirements.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19061.

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Date of creation: May 2013
Publication status: published as 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.
Handle: RePEc:nbr:nberwo:19061
Note: IO LE LS
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Find related papers by JEL classification:
  • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
  • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
  • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
  • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
  • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
  • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition
  • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy
  • K2 - Law and Economics - - Regulation and Business Law
  • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
  • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
  • L5 - Industrial Organization - - Regulation and Industrial Policy
  • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
  • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

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  1. Aigner, Dennis J., 1973. "Regression with a binary independent variable subject to errors of observation," Journal of Econometrics, Elsevier, vol. 1(1), pages 49-59, March.
  2. David S. Lee & Alexandre Mas, 2012. "Long-Run Impacts of Unions on Firms: New Evidence from Financial Markets, 1961--1999," The Quarterly Journal of Economics, Oxford University Press, vol. 127(1), pages 333-378.
  3. Barry T. Hirsch, 2004. "Reconsidering Union Wage Effects: Surveying New Evidence on an Old Topic," Journal of Labor Research, Transaction Publishers, vol. 25(2), pages 233-266, April.
  4. Peter B. Meyer & Anastasiya M. Osborne, 2005. "Proposed Category System for 1960-2000 Census Occupations," Working Papers 383, U.S. Bureau of Labor Statistics.
  5. Morris M. Kleiner & Alan B. Krueger, 2010. "The Prevalence and Effects of Occupational Licensing," British Journal of Industrial Relations, London School of Economics, vol. 48(4), pages 676-687, December.
  6. David Blanchflower & Alex Bryson, 2004. "The Union Wage Premium in the US and the UK," CEP Discussion Papers dp0612, Centre for Economic Performance, LSE.
  7. 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.
  8. Cynthia L. Estlund & Michael L. Wachter (ed.), 2012. "Research Handbook on the Economics of Labor and Employment Law," Books, Edward Elgar Publishing, number 13924.
  9. Bollinger, Christopher R., 1996. "Bounding mean regressions when a binary regressor is mismeasured," Journal of Econometrics, Elsevier, vol. 73(2), pages 387-399, August.
  10. Carl Shapiro, 1986. "Investment, Moral Hazard, and Occupational Licensing," Review of Economic Studies, Oxford University Press, vol. 53(5), pages 843-862.
  11. 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.
  12. 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.
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Cited by:

  1. Suyoun Han & Morris M. Kleiner, 2016. "Analyzing the Influence of Occupational Licensing Duration on Labor Market Outcomes," NBER Working Papers 22810, National Bureau of Economic Research, Inc.
  2. Kleiner, Morris M. & Gittleman, Maury & Klee, Mark, 2014. "Analyzing the Labor Market Outcomes of Occupational Licensing," Staff Report 504, Federal Reserve Bank of Minneapolis.
  3. Yoon Sun Hur & Morris M. Kleiner & Yingchun Wang, 2017. "The Influence of Licensing Engineers on their Labor Market," NBER Chapters,in: U.S. Engineering in the Global Economy National Bureau of Economic Research, Inc.
  4. D. Mark Anderson & Ryan Brown & Kerwin Kofi Charles & Daniel I. Rees, 2016. "The Effect of Occupational Licensing on Consumer Welfare: Early Midwifery Laws and Maternal Mortality," NBER Working Papers 22456, National Bureau of Economic Research, Inc.
  5. Anderson, D. Mark & Brown, Ryan & Charles, Kerwin Kofi & Rees, Daniel I., 2016. "The Effect of Occupational Licensing on Consumer Welfare: Early Midwifery Laws and Maternal Mortality," IZA Discussion Papers 10074, Institute for the Study of Labor (IZA).
  6. Dean Baker, 2016. "Working Paper: The Compensation of Highly Paid Professionals: How Much Is Rent?," CEPR Reports and Issue Briefs 2016-13, Center for Economic and Policy Research (CEPR).

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