Occupational Licensing

When considering potential careers, we often think about highlighting our abilities by earning a college degree, joining a professional group, or taking a short-term job to gain experience. Another labor market mechanism often not considered is occupational licensing. Local, state, or federal governments become the middle-man and workers must first obtain a license from the government before they can be employed. Occupational licensing is one of the largest labor market institutions, with nearly 25% of the labor force required to get licensed. This affects more workers than the minimum wage or union laws. 

 

Academic research explores how this labor market institution affects workers, businesses, and consumers. These laws alter educational attainment and quality, workers' earnings, workers' ability to move from one state to another, the competition in the labor market, and many other important labor market outcomes. In Kentucky, part of the discussion on licensing policies has focused on how licensing differentially affects displaced workers, veterans and their families, immigrants, and workers with criminal records. 

 

Understanding the costs and benefits of occupational licensing laws and their various implementation is an important part of my current research agenda. Please feel free to contact me about these issues. A few resources I find useful are linked below.  

Academic Surveys

Kleiner, Morris M.  2000. "Occupational Licensing", The Journal of Economic Perspectives. Vol. 14, No.4, pp. 189-202.

 

Kleiner, Morris M. 2006. Licensing Occupations: Ensuring Quality or Restricting Competition? W. E. Upjohn Institute for Employment Research. 

Links

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