Analyzing the Labor Market Outcomes of Occupational Licensing

Kleiner, Morris M.; Gittleman, Maury; Klee, Mark A.

doi:10.3386/w20961

Cited by 12 publications

(4 citation statements)

References 15 publications

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“…Weeden (2002) finds the highest wage premiums for licensed employees for professions, and Kleiner and Vorotnikov (2017) report the highest wage advantages for high-earning licensed employees. In contrast, Gittleman, Klee, and Kleiner (2015) report the highest relative wage advantages in the bottom quartile of the U.S. wage distribution. In a follow-up study, Gittleman and Kleiner (2016) report the largest advantages in the bottom and top quartiles compared to the middle.…”

Section: Previous Discussion About Licensing and Wagesmentioning

confidence: 86%

Who Profits from Occupational Licensing?

Haupt

2023

Am Sociol Rev

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Sociologists have debated intensively how and why occupations matter for economic inequality. I argue that occupational licensing alters wage-setting, depending on the characteristics of the licensing system. Licensing not only restricts market entry, as in the United States; some governments, like that of Germany, also regulate task prices and set occupation-specific wage floors for licensed occupations. I claim that the U.S. system leads to a growing licensing wage advantage across the distribution, and the German system leads to a falling one. Furthermore, I discuss how women may particularly benefit from licensing, as it reduces disadvantages women often face in wage-setting. I present unconditional and gender-specific quantile treatment effects based on CPS-MORG and BIBB/BAuA data from 2018. In the United States, wage premiums are highest for employees in the upper-middle part of the distribution and are small for those in the bottom and the top. In Germany, the wage premium is largest for licensed employees within the lower quarter and reduces significantly toward the top. In both countries, women profit significantly more from licensing. These results challenge claims about the role of licensing for inequality in the top, and suggest licensing reduces penalties faced by disadvantaged groups.

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Section: Previous Discussion About Licensing and Wagesmentioning

confidence: 86%

Who Profits from Occupational Licensing?

Haupt

2023

Am Sociol Rev

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“…10 Both institutions support workers, inter alia by raising average wages. However, unions also play a key role in reducing wage inequality by pushing up wages at the bottom of the wage distribution and restraining them at the top, while there is no such effect for occupational licensing (Gittleman et al, 2015). A similar surge in the number of occupations covered by entry regulations has been observed in Canada, Italy and Israel, where it was coupled by increasing restrictiveness as well (Mocetti et al, 2019;Zhang, 2017;von Rueden and Bambalaite, 2020).…”

mentioning

confidence: 86%

“…However, this was not the case for other groups. Gittleman, Klee and Kleiner (2015) Analyzing the Labor Market Outcomes of Occupational Licensing.…”

Section: Qualification Levels Training and Wagesmentioning

confidence: 99%

Occupational entry regulations and their effects on productivity in services: Firm-level evidence

Bambalaite¹,

Nicoletti²,

Rueden³

2020

OECD Economics Department Working Papers

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RESUME Occupational entry regulations and their effects on productivity in services: firm-level evidenceThis paper assesses the link between occupational entry regulations (OER) and labour productivity. It combines international firm-level productivity data with the new composite indicator measuring the stringency of OER in terms of administrative burdens, qualifications requirements, and mobility restrictions estimated in von Rueden and Bambalaite (2020). The analysis is performed for 11 EU countries, for three professional and eight personal services. The evidence suggests that bold reforms easing OER, especially those concerning qualification requirements, could help increase the contribution of personal and professional services to aggregate productivity growth via two channels: the improvement in firm-level productivity growth, where the average firms in regulated sectors could gain around 1.5 percentage points on impact; and a higher contribution of labour reallocation to firms' employment growth, which could increase by up to 10 percent for the most productive firms. Given the scope for reform highlighted by crosscountry differences in regulatory approaches and the potential positive effects on productivity of such reforms, our results are supportive of the need to (i) review regulations in the light of changing public interests, technological developments and international experience, (ii) shift the focus of regulations from inputs to outputs wherever possible, and (iii) check the implications of regulations for competition and explore new ways to deliver better information to consumers.JEL classification codes: J44 ;O43; L5; O57; L16; C21. Les effets de la certification professionnelle sur la productivité des services: Résultats au niveau d'entrepriseCette étude évalue les liens potentiels entre les critères de certification professionnelle et la productivité du travail. L'étude s'appuie à la fois sur des données internationales de productivité au niveau d'entreprise et sur un nouvel indicateur (proposé par von Rueden et Bambalaite, 2020) comparant à travers plusieurs pays la sévérité des critères administratifs, de qualification et de mobilité. L'analyse concerne onze pays européens, trois services professionnels et huit services à la personne. Nos résultats suggèrent que réformer ces critères, spécialement le niveau de qualifications requis, pour faciliter l'accès au marché des prestateurs de ces services pourrait renforcer leur contribution à la croissance de la productivité agrégée de deux façons: cela pourrait accélérer la vitesse à laquelle les entreprises s'approchent des meilleures pratiques internationales, un canal interne aux entreprises à travers lequel leur croissance augmenterait en moyenne d'environ 1,5 points en pourcentage selon nos estimations; et cela pourrait aussi conduire à une plus forte croissance de l'emploi dans les entreprises les plus productives, un canal de réallocation à travers lequel ces entreprises pourraient augmenter leur avantage d'embauche vis à vis des entreprises m...

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“…Entry into professional occupations may be restricted by licensure requirements and by limitations on educational and training opportunities. 5 Government reimbursement rates for services may be set higher, or lower, than would occur in a competitive market. For any of these reasons, wages in these occupations may be higher (or lower) than the competitive model would suggest.…”

mentioning

confidence: 98%

Understanding Pay Differentials Among Health Professionals, Nonprofessionals, And Their Counterparts In Other Sectors

Glied

Pearlstein

2015

Health Affairs

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About half of the $2.1 trillion of US health services spending constitutes compensation to employees. We examined how the wages paid to health-sector employees compared to those paid to workers with similar qualifications in other sectors. Overall, we found that health care workers are paid only slightly more than workers elsewhere in the US economy, but the patterns are starkly different for nonprofessional and professional employees. Nonprofessional health care workers earn slightly less than their counterparts elsewhere in the economy. By contrast, the average nurse earns about 40 percent more than the median comparable worker in a different sector. The average physician earns about 50 percent more than a comparable worker in another sector of the economy, and this differential has increased sharply since 1993. Cost containment is likely to lead to reductions in the earnings of health care professionals, but it will also require using fewer or less skilled employees to produce a given service.

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Analyzing the Labor Market Outcomes of Occupational Licensing

Cited by 12 publications

References 15 publications

Who Profits from Occupational Licensing?

Who Profits from Occupational Licensing?

Occupational entry regulations and their effects on productivity in services: Firm-level evidence

Understanding Pay Differentials Among Health Professionals, Nonprofessionals, And Their Counterparts In Other Sectors

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