Occupational licensing has become an increasingly important topic in labour market policy. Governments across advanced economies are debating whether licensing requirements unnecessarily restrict entry into occupations, reduce labour mobility, and contribute to higher prices for consumers. In the US, dozens of states have adopted reforms intended to reduce unnecessary licensing barriers, while policymakers in Europe have similarly examined occupational regulation as part of broader efforts to improve labour market flexibility and productivity.
A large academic literature has documented the growth of occupational licensing in the US (Kleiner and Krueger 2013, Gittleman et al. 2018) and across Europe (Koumenta and Pagliero 2019). Much less is known, however, about occupational licensing outside advanced economies. Until recently, nationally representative data simply did not exist for much of Latin America, Africa, and Asia.
Our recent research helps fill this gap by assembling harmonised estimates of occupational licensing across 44 countries using nationally representative surveys, including newly collected surveys for many countries where comparable evidence had not previously been available. The results reveal a surprisingly different picture of occupational licensing around the world than many economists previously thought.
Continue reading at the Centre for Economic Policy Research.
Economics of Flourishing
Occupational licensing has attracted growing attention in advanced economies, yet little has been known about its prevalence outside the US. This column presents new evidence from 44 countries using nationally representative surveys. It shows that licensing is widespread around the world and, surprisingly, is often more common in developing economies than in richer nations. Higher occupational licensing is associated with lower per capita incomes and higher informal employment rates. These patterns suggest occupational licensing deserves greater attention as part of the broader debate over labour market regulation, informality, and economic development.
Occupational licensing has become an increasingly important topic in labour market policy. Governments across advanced economies are debating whether licensing requirements unnecessarily restrict entry into occupations, reduce labour mobility, and contribute to higher prices for consumers. In the US, dozens of states have adopted reforms intended to reduce unnecessary licensing barriers, while policymakers in Europe have similarly examined occupational regulation as part of broader efforts to improve labour market flexibility and productivity.
A large academic literature has documented the growth of occupational licensing in the US (Kleiner and Krueger 2013, Gittleman et al. 2018) and across Europe (Koumenta and Pagliero 2019). Much less is known, however, about occupational licensing outside advanced economies. Until recently, nationally representative data simply did not exist for much of Latin America, Africa, and Asia.
Our recent research helps fill this gap by assembling harmonised estimates of occupational licensing across 44 countries using nationally representative surveys, including newly collected surveys for many countries where comparable evidence had not previously been available. The results reveal a surprisingly different picture of occupational licensing around the world than many economists previously thought.
Continue reading at the Centre for Economic Policy Research.
Jon Hartley
Jon Hartley is a regulatory policy fellow at the Archbridge Institute, a Ph.D. candidate in economics at Stanford University, and a Hoover policy fellow at the Hoover Institution. He specializes in finance, labor economics, and macroeconomics. He received his M.P.P. from the Harvard Kennedy School, his M.B.A. from the Wharton School at the University of Pennsylvania, and his B.A. in economics and mathematics from the University of Chicago. He hosts the Hoover Institution podcast Capitalism and Freedom in the Twenty-First Century.
Morris Kleiner
Morris M. Kleiner, PhD, is a labor policy fellow at the Archbridge Institute and one of the world’s leading labor economists. He is a professor at the Humphrey School of Public Affairs at the University of Minnesota and a research associate at the National Bureau of Economic Research. His work covers the role of institutions in labor markets and employment issues in enhancing productivity, with a specific focus on the role of occupational licensing for workers and consumers in the United States and other nations. Dr. Kleiner earned his Ph.D. in economics from the University of Illinois at Urbana-Champaign.
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