Gender, Race, and Earnings
The Divergent Effect of Occupational Licensing on the Distribution of Earnings and Access to the Economy
Originally published in Regulation and Economic Opportunity
Kathleen Sheehan and Diana Thomas examine the laws’ effects on the so-called gender and race wage gaps. Occupational licensing is a barrier to entry that reduces the supply of labor in the licensed industry. Basic economics indicate that wages will rise for workers who are able to gain entry into the industry. However, wage gains will not necessarily be equally distributed among all workers. Furthermore, less entry into the field can lead to more unemployment—and that effect, again, may not be the same across all races and genders.