In the latest Econ Journal Watch, Stephenson and Wendt point out that virtually all labor econ textbooks ignore occupational licensing despite its empirical importance. In particular, they show that licensing matters a lot more in the U.S. than the minimum wage or unions. After all, almost 30% of workers now need a license to do their job, and licensed workers earn a 15% wage premium.
I’m embarassed to admit, then, that my labor notes suffer from the same omission – and I don’t even use a textbook! I have no defense, so I’m just going to say, “Mea culpa” and repent. The next time I teach labor in Fall, 2010, my lecture will be revised to give occupational licensing the treatment it deserves.
Update: Dan’s Klein’s PowerPoint presentation on occupational licensing is awesome.
The post appeared first on Econlib.