Analyzing Occupational Licensing Across Nations

Abstract

Relatively little is known about occupational licensing across nations. We assemble harmonized estimates of licensing prevalence for 44 countries using nationally representative surveys, including new surveys for previously unstudied countries. Licensing ranges from roughly 14 percent of workers in Denmark to more than 40 percent in India and South Africa. Licensed workers earn 6 to 19 percent higher wages than comparable unlicensed workers across specifications. Licensing prevalence is negatively associated with GDP per capita and governance quality, and positively associated with informal employment, suggesting occupational licensing is intertwined with labor market efficiency, formalization, and long-run economic development.