Discussion Paper
Our Guild-Ridden Economy: Issues and Possible Solutions
Kleiner, Morris M. (2015-12-22)
The growth of occupational licensing in the United States has resulted in higher labor costs, restricted services and other economic distortions, with relatively limited benefits in practice quality. This essay describes the state of such licensing, discusses pros and cons of the practice, and suggests several proposals to improve the current situation.
Economic Policy Paper , Paper 15-9

Report
The Labor Market Effects of Occupational Licensing in the Public Sector
Kleiner, Morris M.; Wang, Wenchen (2023-05-10)
In the U.S., occupational licensing is more prevalent in the public sector than in the private sector, but the influence of occupational regulation for public sector workers has not been analyzed in detail. Our study initially examines the probability of a licensed worker selecting into the public sector. Using the probability as a control for these individuals’ risk aversion, we next examine how licensing impacts key labor market outcomes, such as wages, hours worked, and employment in the public sector. Our results show that having an occupational license increases the likelihood of ...
Staff Report , Paper 645

Report
A Welfare Analysis of Occupational Licensing in U.S. States
Soltas, Evan J.; Kleiner, Morris M. (2019-10-15)
We assess the welfare consequences of occupational licensing for workers and consumers. We estimate a model of labor market equilibrium in which licensing restricts labor supply but also affects labor demand via worker quality and selection. On the margin of occupations licensed differently between U.S. states, we find that licensing raises wages and hours but reduces employment. We estimate an average welfare loss of 12 percent of occupational surplus. Workers and consumers respectively bear 70 and 30 percent of the incidence. Higher willingness to pay offsets 80 percent of higher prices for ...
Staff Report , Paper 590

Journal Article
Driving for a license
Kleiner, Morris M. (2006-05)
Occupational licensing continues to grow, but benefits to consumers are not obvious.
Fedgazette , Volume 18 , Issue May , Pages 18-21

Report
Analyzing the Influence of Occupational Licensing Duration and Grandfathering on Labor Market Outcomes
Kleiner, Morris M.; Han, Suyoun (2017-10-23)
The length of time from the implementation of an occupational licensing statute (i.e., licensing duration) may matter in influencing labor market outcomes. Adding to or raising the entry barriers are likely easier once an occupation is established and has gained influence in a political jurisdiction. States often enact grandfather clauses and ratchet up requirements that protect existing workers and increase entry costs to new entrants. We analyze the labor market influence of the duration of occupational licensing statutes for 13 major universally licensed occupations over a 75-year period. ...
Staff Report , Paper 556

Report
Is Occupational Licensing a Barrier to Interstate Migration?
Kleiner, Morris M.; Johnson, Janna (2017-12-06)
Occupational licensure, one of the most significant labor market regulations in the United States, may restrict the interstate movement of workers. We analyze the interstate migration of 22 licensed occupations. Using an empirical strategy that controls for unobservable characteristics that drive long-distance moves, we find that the between-state migration rate for individuals in occupations with state-specific licensing exam requirements is 36 percent lower relative to members of other occupations. Members of licensed occupations with national licensing exams show no evidence of limited ...
Staff Report , Paper 561

Report
Analyzing the Labor Market Outcomes of Occupational Licensing
Gittleman, Maury; Kleiner, Morris M.; Klee, Mark (2014-10-22)
Recent assessments of occupational licensing have shown varying effects of the institution on labor market outcomes. This study revisits the relationship between occupational licensing and labor market outcomes by analyzing a new topical module to the Survey of Income and Program Participation (SIPP). Relative to previously available data, the topical module offers more detailed information on occupational licensing from government, with a larger sample size and access to a richer set of person-level characteristics. We exploit this larger and more detailed data set to examine the labor ...
Staff Report , Paper 504

Report
Occupational Licensing and Labor Market Fluidity
Xu, Ming; Kleiner, Morris M. (2020-07-15)
We show that occupational licensing has significant negative effects on labor market fluidity defined as cross-occupation mobility. Using a balanced panel of workers constructed from the CPS and SIPP data, we analyze the link between occupational licensing and labor market outcomes. We find that workers with a government-issued occupational license experience churn rates significantly lower than those of non-licensed workers. Specifically, licensed workers are 24% less likely to switch occupations and 3% less likely to become unemployed in the following year. Moreover, occupational licensing ...
Staff Report , Paper 606

Report
The Influence of Occupational Licensing on Workforce Transitions to Retirement
Kleiner, Morris M.; Oh, Yun Taek (2024-04-17)
Ways of leaving the labor force has been an understudied aspect of labor market outcomes. Labor market institutions such as occupational licensing may influence how individuals transition to retirement. When and how workers transition from career jobs to full retirement may contribute to pre- and post-retirement well-being. Previous investigations of retirement pathways focused on the patterns and outcomes of retirement transitions, yet the influence of occupational licensing on retirement transition has not been analyzed. In this study, we use the Current Population Survey and Survey of ...
Staff Report , Paper 657