The Effects of Occupational Licensing Laws on Minorities: Evidence from the Progressive Era

Abstract

This paper investigates the effect of occupational licensing regulation on the representation of minority workers in a range of skilled and semi-skilled occupations representing 12 percent of the civilian labor force. We take advantage of a natural experiment afforded by the introduction of state-level licensing regulation during the late nineteenth and to mid twentieth centuries to identify the effects of licensing on minority representation. We find that licensing laws seldom harmed minority workers. In fact, licensing sometimes helped minorities, particularly in occupations where information about worker quality was difficult to ascertain.

Keywords: Occupational licensing, minorities

JEL Classification: J4, J7, L5, N4