The Prevalence and Effects of Occupational Licensing
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.
We thank Larry Katz and Charles Wheelan for comments and Matthew Hendricks for his assistance with the study. We also thank participants at the Labor and Employment Relations Association annual meeting for their comments on an earlier draft. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
- The authors suggest that working in a licensed job is associated with about 15 percent higher wages, other things being equal - about the...
Morris M. Kleiner & Alan B. Krueger, 2010. "The Prevalence and Effects of Occupational Licensing," British Journal of Industrial Relations, London School of Economics, vol. 48(4), pages 676-687, December. citation courtesy of