Panel Paper: How Do Professional Licensing Regulations Affect Practitioners? New Evidence

Thursday, November 6, 2014 : 2:45 PM
Navajo (Convention Center)

*Names in bold indicate Presenter

Mark A. Klee, U.S. Census Bureau

Proponents of professional licensing claim that this institution provides a pathway for practitioners to upgrade skills and thereby improve labor market outcomes.  By contrast, opponents of licensing claim that this institution imposes costly barriers to entry which could alter potential practitioners' desired occupations. To improve our understanding of how licensing regulations impact practitioners, I estimate the effect of professional licensing policy on training. The licensing regulations data come from a panel which contains rich variation in professional licensing policy for four diverse occupations. The individual-level data come from two supplements to the Current Population Survey. More stringent licensing regulations are not associated with higher vocational class enrollment, although increased stringency among some regulations is positively related to whether respondents have acquired training since the current job began. I find limited evidence of a licensing wage premium. This suggests that the cumulative effect of these licensing regulations on the supply of practitioners is small.

Full Paper: