The Effects of Growth in Occupational Licensing on Intergenerational Mobility

Abstract

We use a newly produced data set on growth in occupational licensing of low-income occupations to estimate the relationship between growth in occupational licensing and intergenerational mobility. Our empirical results suggest growth in state licensing is associated with a 1.6% to 6.2% reduction in absolute mobility at the county level. Growth in licensing is also associated with increases in county level Gini coefficients (and thus income inequality) ranging from 3.9% to 15.4%. The relationship between the growth in licensed occupations and absolute mobility provides suggestive evidence of loss in opportunity and reduced mobility for potential entrants into these occupations.

Keywords: occupational licensing, economic mobility, income inequality

JEL Classification: J44