The New Closed Shop? The Economic and Structural Effects of Occupational Licensure

Beth Redbird*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

63 Scopus citations

Abstract

During the past few decades, licensure, a state-enforced mechanism for regulating occupational entry, quickly became the most prevalent form of occupational closure. Broad consensus among researchers holds that licensure creates wage premiums by establishing economic monopolies. This article demonstrates that, contrary to established wisdom, licensure does not limit competition, nor does it increase wages. Results are based on a new occupational dataset, covering 30 years, that exploits interstate variability in licensure across the 300 census-identified occupations. I argue that licensure, instead of increasing wages, creates a set of institutional mechanisms that enhance entry into the occupation, particularly for historically disadvantaged groups, while simultaneously stagnating quality.

Original languageEnglish (US)
Pages (from-to)600-624
Number of pages25
JournalAmerican Sociological Review
Volume82
Issue number3
DOIs
StatePublished - Jun 1 2017

Funding

I am grateful for the invaluable assistance of David Grusky, Mark Granovetter, Michelle Jackson, Morris Kleiner, Yujia Liu, John Meyer, Susan Olzak, John Pencavel, Matthew Snipp, Jesper Sørensen, and Kim Weeden. This project has been funded, either wholly or in part, with federal funds from DOL/ETA, under Contract Number DOLJ111A21738.

Keywords

  • inequality
  • licensing
  • occupations
  • rent
  • wages
  • work

ASJC Scopus subject areas

  • Sociology and Political Science

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