Skip to main content
Article thumbnail
Location of Repository

Analyzing the Extent and Influence of Occupational Licensing on the Labor Market

By Morris M. Kleiner and Alan B. Krueger


This study examines the extent and influence of occupational licensing in the U.S. using a specially designed national labor force survey. Specifically, we provide new ways of measuring occupational licensing and consider what types of regulatory requirements and what level of government oversight contribute to wage gains and variability. Estimates from the survey indicated that 35 percent of employees were either licensed or certified by the government, and that 29 percent were fully licensed. Another 3 percent stated that all who worked in their job would eventually be required to be certified or licensed, bringing the total that are or eventually must be licensed or certified by government to 38 percent. We find that licensing is associated with about 18 percent higher wages, but the effect of governmental certification on pay is much smaller. Licensing by larger political jurisdictions is associated with higher wage gains relative to only local licensing. We find little association between licensing and the variance of wages, in contrast to unions. Overall, our results show that occupational licensing is an important labor market phenomenon that can be measured in labor force surveys.occupational licensing, labor market institutions, labor market data, wages and labor market institutions, wage inequality and labor market institutions

OAI identifier:

Suggested articles


  1. (1962). Capitalism and Freedom.
  2. (1952). Council of State Governments.
  3. (2000). Does Regulation Affect Economic Outcomes? The Case of Dentistry.”
  4. (2010). Forthcoming. “The Gender Gap in Funeral Directors: Burying Women with Ready-to-Embalm Laws.”
  5. (1945). Income from Independent Professional Practice.
  6. (1986). Investment, Moral Hazard and Occupational Licensing.”
  7. (2005). Minnesota Board of Barber and Cosmetology Examiners.
  8. (1974). Occupational Licensing and the Public Interest.”
  9. (1998). Politics or Public Interest? An Empirical Examination of Occupational Licensure.” Unpublished manuscript,
  10. (1996). The Effect of Unions on the Structure of Wages: A Longitudinal Analysis,"
  11. (2008). The Feasibility and Importance of Adding Measures
  12. (1980). The Interpretation of Dummy Variables in Semilogarithmic Equations,”
  13. (1937). The Wealth of Nations. New York: Modern Library.. (Originally published 1776.)
  14. (1986). Union Relative Wage Effects: A Survey.
  15. (1982). Wage Practices and Wage Dispersion within

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.