Working Paper: NBER ID: w25262
Authors: Peter Q. Blair; Bobby W. Chung
Abstract: We exploit state variation in licensing laws to study the effect of licensing on occupational choice using a boundary discontinuity design. We find that licensing reduces equilibrium labor supply by an average of 17%-27%. The negative labor supply effects of licensing appear to be strongest for white workers and comparatively weaker for black workers.
Keywords: Occupational Licensing; Labor Supply; Boundary Discontinuity Design
JEL Codes: J21; K23; L51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Occupational licensing (J44) | Labor supply (J22) |
| Boundary discontinuity design (F55) | Labor supply (J22) |
| Occupational licensing (J44) | Labor supply (Black workers) (J20) |
| Occupational licensing (J44) | Labor supply (White workers) (J29) |
| Licensing requirements (D45) | Labor supply (J22) |
| Training requirements (M53) | Labor supply (White women) (J29) |