The Impact of Introducing Mandatory Occupational Licensing

Plesca, Miana (2015) The Impact of Introducing Mandatory Occupational Licensing. Modern Economy, 06 (12). pp. 1309-1326. ISSN 2152-7245

[thumbnail of ME_2015122915455510.pdf] Text
ME_2015122915455510.pdf - Published Version

Download (2MB)

Abstract

Licensing imposes barriers to entry in an occupation, effectively restricting the supply of licensed workers in the occupation, and driving prices up. We evaluate the effects of introducing mandatory licensing in all construction trades in a Canadian province, Ontario. Evidence based on vacancies and wage premia suggests the construction trades are in short supply in Ontario. We estimate the deadweight loss for Ontario’s construction industry resulting from higher prices and decreased construction output. Using an elasticity of labour demand of 31%, we obtain a deadweight loss ranging between $19 million and $75 million, depending on projected wage increases ranging between 10% and 20%. We ignore here potential benefits resulting from the increased human capital of construction workers.

Item Type: Article
Subjects: AP Academic Press > Multidisciplinary
Depositing User: Unnamed user with email support@apacademicpress.com
Date Deposited: 12 Jul 2023 12:33
Last Modified: 05 Jun 2024 09:54
URI: http://info.openarchivespress.com/id/eprint/1780

Actions (login required)

View Item
View Item