The Effects of Occupational Licensing: Evidence from Business‐Level Data

25 Pages Posted: 1 May 2020

Date Written: December 2019

Abstract

Occupational licensing currently affects more than 1,000 occupations in the United States. I use confidential US Census Bureau business micro‐data to shed light on the effect of occupational licensing in cosmetology on key market outcomes and study its effect on the providers of occupational training. Occupational licensing regulation does not seem to affect the equilibrium number of practitioners or prices of services to consumers, but is associated with significantly lower practitioner entry and exit rates. I further find states with more stringent licensing requirements to have more instructors and a larger median size of training facilities, suggesting possible barriers to entry for the training schools. Instructors, however, do not earn more in such states.

Suggested Citation

Zapletal, Marek, The Effects of Occupational Licensing: Evidence from Business‐Level Data (December 2019). British Journal of Industrial Relations, Vol. 57, Issue 4, pp. 894-918, 2019, Available at SSRN: https://ssrn.com/abstract=3589674 or http://dx.doi.org/10.1111/bjir.12434

Marek Zapletal (Contact Author)

The Brattle Group ( email )

201 Mission Street, Suite 2800
San Francisco, CA 94105
United States

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