Peter Blair, Bobby Chung

We exploit state variation in licensing laws to study the effect of licensing on occupational choice using a boundary discontinuity design. We find that licensing reduces equilibrium labor supply by an average of 17%-27%. The negative labor supply effects of licensing appear to be strongest for white workers and comparatively weaker for black workers.

JEL Codes
J21: Labor Force and Employment, Size, and Structure
K23: Regulated Industries and Administrative Law
L51: Economics of Regulation
occupational licensing
Labor Supply