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Title: analyzing the extent and influence of occupational licensing on the labor market
Resulting in 1 citation.
1. Kleiner, Morris M.
Krueger, Alan B.
Analyzing the Extent and Influence of Occupational Licensing on the Labor Market
NBER Working Paper 14979, National Bureau of Economic Research, May 2009.
Also: http://www.nber.org/papers/w14979
Cohort(s): NLSY79
Publisher: National Bureau of Economic Research (NBER)
Keyword(s): Census of Population; Labor Market Demographics; Occupations; Unions; Wage Determination

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.

[..general estimates of crosssectional studies using Census data of state licensing's influence on wages with standard labor market controls show a range from 10 to 15 percent for higher wages associated with occupational licensing. Estimates were developed from the National Longitudinal Survey of Youth (NLSY) from 1984 to 2000 and show the difference in wages between changers from unlicensed to licensed occupations and between those who move from a licensed occupation to an unregulated one. The estimates show an impact of about 17 percent of moving to a licensed occupation relative to moving from a licensed occupation to an unlicensed one….]

Bibliography Citation
Kleiner, Morris M. and Alan B. Krueger. "Analyzing the Extent and Influence of Occupational Licensing on the Labor Market." NBER Working Paper 14979, National Bureau of Economic Research, May 2009.