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The Effects of Occupational Licensing: Evidence from Business‐Level Data

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  • Marek Zapletal
Abstract
Occupational licensing currently affects more than 1,000 occupations in the United States. I use confidential US Census Bureau business micro‐data to shed light on the effect of occupational licensing in cosmetology on key market outcomes and study its effect on the providers of occupational training. Occupational licensing regulation does not seem to affect the equilibrium number of practitioners or prices of services to consumers, but is associated with significantly lower practitioner entry and exit rates. I further find states with more stringent licensing requirements to have more instructors and a larger median size of training facilities, suggesting possible barriers to entry for the training schools. Instructors, however, do not earn more in such states.

Suggested Citation

  • Marek Zapletal, 2019. "The Effects of Occupational Licensing: Evidence from Business‐Level Data," British Journal of Industrial Relations, London School of Economics, vol. 57(4), pages 894-918, December.
    • Handle: RePEc:bla:brjirl:v:57:y:2019:i:4:p:894-918
    DOI: 10.1111/bjir.12434
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    References listed on IDEAS

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    Cited by:

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    3. Chung, Bobby W., 2022. "The costs and potential benefits of occupational licensing: A case of real estate license reform," Labour Economics, Elsevier, vol. 76(C).
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    5. Yelowitz, Aaron & Ingram, Samuel J., 2021. "How Does Occupational Licensing Affect Entry into the Medical Field? An Examination of EMTs," IZA Discussion Papers 14071, Institute of Labor Economics (IZA).

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