Social Econ Blog

We talked a few weeks ago about occupational licensing. Here's some additional summary:

10. Analyzing the Extent and Influence of Occupational Licensing on
the Labor Market
by Morris M. Kleiner, Alan B. Krueger - #14979 (LS)

Abstract:

This study examines the extent and influence of occupational
licensing in the U.S. using a specially designed national labor force
survey. Specifically, we provide new ways of measuring occupational
licensing and consider what types of regulatory requirements and what
level of government oversight contribute to wage gains and
variability. Estimates from the survey indicated that 35 percent of
employees were either licensed or certified by the government, and
that 29 percent were fully licensed. Another 3 percent stated that
all who worked in their job would eventually be required to be
certified or licensed, bringing the total that are or eventually must
be licensed or certified by government to 38 percent. We find that
licensing is associated with about 14 percent higher wages, but the
effect of governmental certification on pay is much smaller.
Licensing by multiple political jurisdictions is associated with the
highest wage gains relative to only local licensing. Specific
requirements by the government for a worker to enter an occupation,
such as education level and long internships, are positively
associated with wages. We find little association between licensing
and the variance of wages, in contrast to unions. Overall, our
results show that occupational licensing is an important labor market
phenomenon that can be measured in labor force surveys.

http://papers.nber.org/papers/W14979