Working Paper: NBER ID: w14308
Authors: Morris M. Kleiner; Alan B. Krueger
Abstract: This study provides the first nation-wide analysis of the labor market implications of occupational licensing for the U.S. labor market, using data from a specially designed Gallup survey. We find that in 2006, 29 percent of the workforce was required to hold an occupational license from a government agency, which is a higher percentage than that found in studies that rely on state-level occupational licensing data. Workers who have higher levels of education are more likely to work in jobs that require a license. Union workers and government employees are more likely to have a license requirement than are nonunion or private sector employees. Our multivariate estimates suggest that licensing has about the same quantitative impact on wages as do unions -- that is about 15 percent, but unlike unions which reduce variance in wages, licensing does not significantly reduce wage dispersion for individuals in licensed jobs.
Keywords: occupational licensing; labor market; wages; unions
JEL Codes: J08
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Occupational license (J44) | Higher hourly earnings (J31) |
| Occupational license (J44) | Wage dispersion (J31) |
| Licensing (D45) | Perceived competence (D83) |