Analyzing Occupational Licensing Among the States

Posted: 23 Jan 2018

See all articles by Evgeny S Vorotnikov

Evgeny S Vorotnikov

Fannie Mae; University of Minnesota - Twin Cities - Department of Applied Economics; University of Minnesota - Twin Cities - Carlson School of Management; University of Minnesota - Twin Cities - Minnesota Population Center

Morris M. Kleiner

Humphrey School of Public Affairs; National Bureau of Economic Research (NBER)

Date Written: October 1, 2017

Abstract

The study provides new evidence of the influence of occupational regulations on the U.S. economy. Our analysis, unlike previous studies, was able to obtain a representative sample of the population at the state level, which allowed us to estimate the cross-sectional effects of occupational licensing for each state. The state-level analysis demonstrates considerable variation in percentage of the workforce that has attained a license, and unlike minimum wages or unionization, licensing shows no regional patterns in the distribution of occupational licensing. The analysis also shows considerable variation in the influence of licensing on earnings across the states. The national estimates suggest that occupational licensing raises wages by about 11% after controlling for human capital and other observable characteristics. Finally, our analysis shows the influence of occupational regulation on wage inequality across the income distribution.

Keywords: Wage determination with occupational licensing, Income inequality with occupational licensing

Suggested Citation

Vorotnikov, Evgeny S and Kleiner, Morris M., Analyzing Occupational Licensing Among the States (October 1, 2017). Journal of Regulatory Economics, Vol. 52, No. 2, 2017, Available at SSRN: https://ssrn.com/abstract=3102519

Evgeny S Vorotnikov (Contact Author)

Fannie Mae ( email )

3900 Wisconsin Avenue, NW
Washington, DC 20016-2892
United States

University of Minnesota - Twin Cities - Department of Applied Economics ( email )

MN
United States

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

University of Minnesota - Twin Cities - Minnesota Population Center ( email )

50 Willey Hall
225-19th Ave S
Minneapolis, MN 55455
United States

Morris M. Kleiner

Humphrey School of Public Affairs ( email )

Minneapolis, MN 55455
United States
612-625-2089 (Phone)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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