Morris M. Kleiner is at the University of Minnesota and NBER. Alan B. Krueger is at Princeton University and the US Department of the Treasury.
The Prevalence and Effects of Occupational Licensing
Version of Record online: 27 JUL 2010
© Blackwell Publishing Ltd/London School of Economics 2010
British Journal of Industrial Relations
Volume 48, Issue 4, pages 676–687, December 2010
How to Cite
Kleiner, M. M. and Krueger, A. B. (2010), The Prevalence and Effects of Occupational Licensing. British Journal of Industrial Relations, 48: 676–687. doi: 10.1111/j.1467-8543.2010.00807.x
- Issue online: 27 JUL 2010
- Version of Record online: 27 JUL 2010
- Final version accepted on 13 December 2009.
Our study provides the first national analysis of the labour market implications of workers who are licensed by any agency of the government in the USA. Using a specially designed Gallup survey of a nationally representative sample of Americans, we provide an analysis of the influence of this form of occupational regulation. We find that 29 per cent of the workforce is required to hold a licence, which is a higher percentage than that found in other studies that rely on state-level occupational licensing data or single states. Workers who have higher levels of education are more likely to work in jobs that require a licence. Union workers and government employees are more likely to have a licence requirement than are non-union 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 per cent — and that being both licensed and in a union can increase wages by more than 24 per cent. However, unlike unions which reduce variance in wages, licensing does not significantly reduce wage dispersion for individuals in licensed jobs.