Income Mobility, Automation and Occupational Licensing

21 Pages Posted: 3 Jul 2024 Last revised: 6 Nov 2024

See all articles by Vincent Geloso

Vincent Geloso

George Mason University - Department of Economics

Alicia Plemmons

West Virginia University

Pradyot Sharma

George Mason University - Department of Economics

Date Written: June 27, 2024

Abstract

Technological change has long been tied with distributional concerns due to displacement against certain skills on labor markets. Short-run dislocations could create scarring in the long-run. For example, shifts against less skilled workers with children could limit their ability to improve the inter-generational income mobility of their children. However, the existing literature rarely emphasizes the possibility that the ill-effects of technological change are conditional on government regulations that limit the ability of workers to rapidly adjust thus creating the scarring. In this article, we document the importance of these regulations by focusing on changes in occupational licensing of low-income professions, exposure to industrial automation in the United States since the 1980s and inter-generational income mobility. We find that a significant share of the prediction of falling income mobility tied to automation are actually tied to changes in occupational licensing. Areas that experienced labor market deregulation and high exposure to automation suffered far less than areas that did not engage in deregulation.

Keywords: Income Mobility, Regulation, Automation, Occupational Licensing

Suggested Citation

Geloso, Vincent and Plemmons, Alicia and Sharma, Pradyot, Income Mobility, Automation and Occupational Licensing (June 27, 2024). GMU Working Paper in Economics No. 24-26, Available at SSRN: https://ssrn.com/abstract=4878718 or http://dx.doi.org/10.2139/ssrn.4878718

Vincent Geloso (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

Alicia Plemmons

West Virginia University ( email )

P.O. Box 6025
Morgantown, WV 26506
United States

Pradyot Sharma

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

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