How Much of Barrier to Entry is Occupational Licensing?
36 Pages Posted: 19 Nov 2018
Date Written: November 2018
We exploit state variation in licensing laws to study the effect of licensing on occupational choice using a boundary discontinuity design. We find that licensing reduces equilibrium labor supply by an average of 17%-27%. The negative labor supply effects of licensing appear to be strongest for white workers and comparatively weaker for black workers.
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