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Occupational entry regulations and their effects on productivity in services: Firm-level evidence

Author

Listed:
  • Indre Bambalaite
  • Giuseppe Nicoletti
  • Christina von Rueden

Abstract

This paper assesses the possible dynamic effects of occupational entry regulations (OER) on productivity. It combines firm-level productivity data with a new cross-country policy indicator measuring the stringency of OER by the presence of administrative burdens, qualifications requirements, and mobility restrictions, for five professional and ten personal services. The evidence suggests that bold reforms easing OER, especially those concerning qualification requirements, could help increase the contribution of personal and professional services to aggregate productivity growth via two channels: the acceleration of their catch up to best global practices (within-firm channel), where firms in regulated sectors could gain up to 2.5 percentage points of productivity on average; and a higher contribution of labour reallocation to firms’ employment growth (between-firm channel), which could increase by up to 10 percent for the most productive firms.

Suggested Citation

  • Indre Bambalaite & Giuseppe Nicoletti & Christina von Rueden, 2020. "Occupational entry regulations and their effects on productivity in services: Firm-level evidence," OECD Economics Department Working Papers 1605, OECD Publishing.
    • Handle: RePEc:oec:ecoaaa:1605-en
    DOI: 10.1787/c8b88d8b-en
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    Cited by:

    1. Mocetti, Sauro & Rizzica, Lucia & Roma, Giacomo, 2021. "Regulated occupations in Italy: Extent and labour market effects," International Review of Law and Economics, Elsevier, vol. 66(C).
    2. Rostam-Afschar Davud, 2020. "Inklusive Beschäftigungspolitik: Fakten, Herausforderungen und neue Ideen zur Regulierung von Berufen," Zeitschrift für Wirtschaftspolitik, De Gruyter, vol. 69(2), pages 129-139, August.

    More about this item

    Keywords

    catch-up; occupational licensing; productivity; reallocation; regulations;
    All these keywords.

    JEL classification:

    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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