Absence of conflict of interest.
The study examines the impact of Occupational Licensing (holding an active job certification or license) on hourly wages, weekly earnings, and hours worked per week.
Using data from the U.S. Current Population Survey (CPS), the author conducted a non-experimental study to compare outcomes for workers who held an active job certification or license versus those who did not.
The study suggested that workers with certifications and licenses earn more and work more hours per week than workers without.
The quality of causal evidence presented in this report is low because the author did not account for self-selection into receipt of an occupational license, which is likely to lead to differences in characteristics between those with and without a certification beyond those factors that the author controls for. This means we are not confident that the estimated effects are attributed to holding a job certification or license; other factors are likely to have contributed.
Features of the Intervention
Occupational licensing is a form of occupational regulation that requires workers to obtain specific credentials to practice certain occupations. Such regulations include educational requirements, training, and certification tests and vary in range from less restrictive (e.g., a registration requirement) to very restrictive (e.g., requiring a license to practice). Occupational licensing is structured to maintain the quality of labor in licensed occupations and may also protect the licensed practitioners.
Features of the Study
This study uses a non-experimental regression analysis to compare workers who do and do not hold an active job certification or license. (The author examines differences in outcomes by citizenship status, which falls outside the scope of this review.) The study uses data for approximately 200,000 U.S. workers from the IPUMS-CPS surveys from October 2017 to January 2019, limited to individuals aged 16 to 65 who were currently employed and not in the armed forces. In 2015 the IPUMS-CPS added questions on state and industry licenses, certifications, and the use of certifications in employment. The study estimates the impact of holding any active job certification or license and, separately, holding a government-issued certification or license.
Earnings and Wages
- The study suggests there is a positive relationship between holding a job certification or license (overall and government-issued) and both hourly wages and weekly earnings.
- The study suggests there is a positive relationship between holding a job certification or license (overall and government-issued) and total hours worked per week.
Considerations for Interpreting the Findings
The author compares earnings and hours worked between U.S. workers who do and do not hold a job certification or license but does not consider that workers self-select into fields that require occupational licensing. This self-selection is likely to lead to systematic differences between these two groups which in turn may directly influence their earnings and employment. We therefore cannot be certain that the observed differences in these outcomes is due only to holding a job certification or license; other factors likely contribute as well.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because the author did not account for self-selection into occupations that require certification, which is likely influenced by characteristics that directly affect earnings and employment. This means we are not confident that the estimated effects are attributable to occupational licensing alone; other factors are likely to have contributed.