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Regulation of Occupations across Nations

Paper Session

Sunday, Jan. 6, 2019 10:15 AM - 12:15 PM

Hyatt Regency Atlanta, Hanover C
Hosted By: Labor and Employment Relations Association
  • Chair: Alex Bryson, University College London

How Much of a Barrier to Entry is Occupational Licensing?

Peter Q. Blair
,
Clemson University

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 labor supply by 17%-27%.

Effects of Occupational Licensing and Unions on Labour Market Earnings in Canada

Tingting Zhang
,
Western New England University

Abstract

Based on longitudinal data from the Canadian Survey of Labour and Income Dynamics (SLID) from 1999 to 2011, a pay premium of approximately 14.1% is estimated for occupational licensing, slightly higher than the union wage premium, as 7.4%. Fixed effects to estimates from the longitudinal data show a 2.6% and 4.4% premium for licensing and unionization respectively.

Occupational Regulation and Immigrant Earnings: Evidence from the EU

Maria Koumenta
,
Queen Mary University of London
Mario Pagliero
,
University of Turin

Abstract

Immigrants face wage penalties vis-à-vis comparable natives commonly attributed to human capital depreciation, statistical discrimination and occupational mismatching. Using a representative sample of the EU labour force, we present the first study on the relationship between occupational regulation and immigrants’ earnings and show that occupational regulation can partly correct for these processes.

A Welfare Analysis of Occupational Licensing in U.S. States

Morris Kleiner
,
University of Minnesota
Evan Soltas
,
Massachusetts Institute of Technology

Abstract

We assess the consequences of occupational licensing policy using variation across U.S. states and occupations in the licensed share of workers. In our model, licensing may restrict labor supply but may also raise labor demand via higher willingness to pay, and the employment effect is a sufficient statistic for welfare. On the margin, licensing raises wages and hours but reduces employment in licensed occupations, with a welfare loss of 10 percent of surplus. Licensing has little effect on demand but reduces supply, in part by requiring investment in occupation-specific human capital.
Discussant(s)
Edward J. Timmons
,
St. Francis University
Jason Hicks
,
University of Minnesota
Mark A. Klee
,
U.S. Census Bureau
Victoria Udalova
,
U.S. Census Bureau
JEL Classifications
  • J4 - Particular Labor Markets