18 Pages Posted: 1 Sep 2008
This study provides the first nation-wide analysis of the labor market implications of occupational licensing for the U.S. labor market, using data from a specially designed Gallup survey. We find that in 2006, 29 percent of the workforce was required to hold an occupational license from a government agency, which is a higher percentage than that found in studies that rely on state-level occupational licensing data. Workers who have higher levels of education are more likely to work in jobs that require a license. Union workers and government employees are more likely to have a license requirement than are nonunion or private sector employees. Our multivariate estimates suggest that licensing has about the same quantitative impact on wages as do unions - that is about 15 percent, but unlike unions which reduce variance in wages, licensing does not significantly reduce wage dispersion for individuals in licensed jobs.
Keywords: occupational licensing, regulation, wages
JEL Classification: J8
Suggested Citation: Suggested Citation
Kleiner, Morris M. and Krueger, Alan B., The Prevalence and Effects of Occupational Licensing. IZA Discussion Paper No. 3675. Available at SSRN: https://ssrn.com/abstract=1261460 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x