Occupational Licensing: Barriers, Competition, and Equity in the Modern Labor Market

Session Submission Type: Panel

Abstract

Occupational licensing is one of the most expansive and contested labor market institutions in the United States. This session brings together new empirical work that explores how licensing regimes shape labor market dynamics, access to professions, and inequality. While licensing can address information asymmetries and improve quality, it also imposes barriers to entry, restricts mobility, and may exacerbate or alleviate disparities across demographic lines. The papers in this session examine these trade-offs from diverse angles using historical and contemporary data.

One paper models competition between overlapping licensed professions, showing how independent licensing boards can increase both quality and access while influencing rival professions’ standards. Another study uses recent reforms in Arkansas to examine how lowering teacher licensure exam cut scores affects who enters the profession, their effectiveness, and the broader implications for teacher supply and equity. A third paper investigates how occupational licensing affects racial wage and employment gaps within occupations, revealing heterogeneous effects across professions and shedding light on whether licensure narrows or widens racial disparities. The final paper explores how the limited portability of licenses across states hinders employment and career continuity for women migrating for family reasons, with consequences for gender earnings gaps and overall welfare.

Together, these papers provide a nuanced and evidence-rich account of how occupational licensing shapes labor markets, offering important implications for policy debates on equity, efficiency, and mobility in licensed professions.

Policy Area

• Employment and Training Programs

Chair

• Dan Goldhaber, American Institutes for Research

Discussant

• Marcus Winters, Boston University

Organizer

• John Fallon, Boston University

Individual Presentations

• The Effects of Occupational Licensing on Intraoccupational Racial Wage and Employment Gaps - Presenting Author: Ethan James Ellis, University of Minnesota

• Adjusting to Another Board: An Analysis of Competitive Occupational Licensure - Presenting Author: John Fallon, Boston University

• How Low Can You Go? The Impact of Reducing Teacher Licensure Exam Cut Scores - Presenting Author: Josh B McGee, University of Arkansas

• The Ties that Bind: Occupational Licensing and Family Migration - Presenting Author: Kihwan Bae, West Virginia University