This paper develops a model of the economic impact of occupational licensure. The model is then used to estimate the effects of occupational licensure on wages and the division of labor in clinical laboratories and to generate a lower-bound estimate of the welfare impact of licensure. Estimates are based on cross-section and time-series data on areas with and without licensure of laboratory personnel. Recent licensure laws have no effect on wages or employment, but older, more stringent laws sharply increase the wages and employment of skilled personnel in laboratories.
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