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The Effect of Occupational Licensing Deregulation on Migrants in the German Skilled Crafts Sector

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  • Runst, Petrik

Abstract

Occupational Licensing may reduce the entry of minorities, such as migrants, into a profession if the likelihood of fulfilling the licensing requirements is lower in this group. While policy makers typically justify occupational licensing on the grounds of quality control it, thus, also has the potential to adversely affect the labor market integration of foreign‐born citizens. Before the backdrop of increased levels of migration into Germany, and the general discussion about the free movement of labor in Europe, this paper empirically examines the effects of the deregulation of occupational licensing in the German crafts sector on the proportion of migrants working in this sector. The results suggest that the reform has increased the proportion of migrants by about 5 percentage points among self‐employed professionals and 6 percentage points among employed craftsmen.

Suggested Citation

  • Runst, Petrik, 2016. "The Effect of Occupational Licensing Deregulation on Migrants in the German Skilled Crafts Sector," ifh Working Papers 6 (2016), Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh).
  • Handle: RePEc:zbw:ifhwps:62016
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    File URL: https://www.econstor.eu/bitstream/10419/191848/1/ifh-wp-06-2016.pdf
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    References listed on IDEAS

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    1. Amelie Constant & Klaus Zimmermann, 2006. "The Making of Entrepreneurs in Germany: Are Native Men and Immigrants Alike?," Small Business Economics, Springer, vol. 26(3), pages 279-300, April.
    2. Morris M. Kleiner, 2000. "Occupational Licensing," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 189-202, Fall.
    3. Morris M. Kleiner & Alan B. Krueger, 2013. "Analyzing the Extent and Influence of Occupational Licensing on the Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 31(S1), pages 173-202.
    4. Richard Blundell & Monica Costa Dias, 2009. "Alternative Approaches to Evaluation in Empirical Microeconomics," Journal of Human Resources, University of Wisconsin Press, vol. 44(3).
    5. Davud Rostam-Afschar, 2014. "Entry regulation and entrepreneurship: a natural experiment in German craftsmanship," Empirical Economics, Springer, vol. 47(3), pages 1067-1101, November.
    6. Pashigian, B Peter, 1979. "Occupational Licensing and the Interstate Mobility of Professionals," Journal of Law and Economics, University of Chicago Press, vol. 22(1), pages 1-25, April.
    7. Morris M. Kleiner, 2006. "Licensing Occupations: Ensuring Quality or Restricting Competition?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number lo, july-dece.
    8. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
    9. Maya N. Federman & David E. Harrington & Kathy J. Krynski, 2006. "The Impact of State Licensing Regulations on Low-Skilled Immigrants: The Case of Vietnamese Manicurists," American Economic Review, American Economic Association, vol. 96(2), pages 237-241, May.
    10. Horst Feldmann, 2003. "Labor Market Regulation and Labor Market Performance: Evidence Based on Surveys among Senior Business Executives," Kyklos, Wiley Blackwell, vol. 56(4), pages 509-540, November.
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    Cited by:

    1. Runst, Petrik, 2016. "Bedeutung von Migranten als Auszubildende, Fachkräfte, Meister und Selbstständige im Handwerk," Göttinger Beiträge zur Handwerksforschung 12, Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh).
    2. Müller, Klaus, 2018. "Neue Daten zu den Auswirkungen der Teilderegulierung des Handwerks 2004," Göttinger Beiträge zur Handwerksforschung 19, Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh).

    More about this item

    Keywords

    Occupational Licensing; Migrants; Germany; Crafts;

    JEL classification:

    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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