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http://ssrn.com/abstract=1408899
 
 

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Analyzing the Extent and Influence of Occupational Licensing on the Labor Market


Morris M. Kleiner


University of Minnesota - Twin Cities - Hubert H. Humphrey Institute of Public Affairs; National Bureau of Economic Research (NBER)

Alan B. Krueger


Princeton University - Industrial Relations Section; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)

May 2009

NBER Working Paper No. w14979

Abstract:     
This study examines the extent and influence of occupational licensing in the U.S. using a specially designed national labor force survey. Specifically, we provide new ways of measuring occupational licensing and consider what types of regulatory requirements and what level of government oversight contribute to wage gains and variability. Estimates from the survey indicated that 35 percent of employees were either licensed or certified by the government, and that 29 percent were fully licensed. Another 3 percent stated that all who worked in their job would eventually be required to be certified or licensed, bringing the total that are or eventually must be licensed or certified by government to 38 percent. We find that licensing is associated with about 14 percent higher wages, but the effect of governmental certification on pay is much smaller. Licensing by multiple political jurisdictions is associated with the highest wage gains relative to only local licensing. Specific requirements by the government for a worker to enter an occupation, such as education level and long internships, are positively associated with wages. We find little association between licensing and the variance of wages, in contrast to unions. Overall, our results show that occupational licensing is an important labor market phenomenon that can be measured in labor force surveys.

Number of Pages in PDF File: 37

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Date posted: May 26, 2009  

Suggested Citation

Kleiner, Morris M. and Krueger, Alan B., Analyzing the Extent and Influence of Occupational Licensing on the Labor Market (May 2009). NBER Working Paper No. w14979. Available at SSRN: http://ssrn.com/abstract=1408899

Contact Information

Morris M. Kleiner (Contact Author)
University of Minnesota - Twin Cities - Hubert H. Humphrey Institute of Public Affairs ( email )
and the Industrial Relations Center
Minneapolis, MN 55455
United States
612-625-2089 (Phone)
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Alan B. Krueger
Princeton University - Industrial Relations Section ( email )
Princeton, NJ 08544-2098
United States
609-258-4046 (Phone)
609-258-2907 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
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