Occupational Licensing , Labor Supply , and Human Capital *

  title={Occupational Licensing , Labor Supply , and Human Capital *},
  author={Morris M. Kleiner Evan J. Soltas},
We analyze theoretically and empirically the effects and welfare consequences of occupational licensing policies. In our model, workers respond to a fixed license cost by adjusting hours, occupational choice, and consumption, but licensing also affects willingness to pay for goods produced by licensed labor via quality and selection effects. We prove the employment effect of licensing is a sufficient statistic for welfare analysis. Using variation across U.S. states and occupations in the share… 

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