Analyzing the Influence of Occupational Licensing Duration and Grandfathering on Wage Determination

A Model of Occupational Licensing and Statistical Discrimination

AEA Papers and Proceedings ◽

10.1257/pandp.20211112 ◽

2021 ◽

Vol 111 ◽

pp. 201-205

Author(s):

Peter Q. Blair ◽

Bobby W. Chung

Keyword(s):

Black Men ◽

Wage Gap ◽

Empirical Finding ◽

White Men ◽

Comparative Statics ◽

Statistical Discrimination ◽

Wage Determination ◽

Occupational Licensing ◽

Demographic Groups ◽

Racial Wage Gap

We develop a model of statistical discrimination in occupational licensing with endogenous occupation selection and wage determination. We find a unique equilibrium with sharp comparative statics. Our key theoretical result is that the licensing premium is higher for workers who are members of demographic groups that face a higher cost of licensing. The predictions of the model can explain, for example, the empirical finding in the literature that occupational licenses that preclude felons close the racial wage gap among men by conferring a higher premium to Black men than to White men (Blair and Chung 2018).

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Wage-setting Mechanisms in the Russian Industry

Voprosy Ekonomiki ◽

10.32609/0042-8736-2004-4-66-90 ◽

2004 ◽

pp. 66-90 ◽

Cited By ~ 3

Author(s):

R. Kapelyushnikov

Keyword(s):

Special Section ◽

Close Correlation ◽

Specific Model ◽

Wage Determination ◽

Collective Agreement ◽

Wage Setting ◽

Industrial Enterprises ◽

Subsistence Minimum ◽

Competitive Model ◽

Very High

The paper examines a specific model of wage-setting evolved in Russia under transition. Using new survey data author reveals paradoxical characteristics of wage-setting mechanisms at Russian industrial enterprises: very high union and collective agreement coverage; nearly unilateral control of managers over wage determination; close correlation between earnings and enterprises' performance; voluntary utilization of wage standards established by the state. The special section explores effects of fulfilling a new provision stipulated for by the recently adopted Labor Code to raise minimum wage to the subsistence minimum level. The author concludes that wage-setting in the Russian labor market is at odds with a textbook competitive model and poorly fits into many other sophisticated theoretical schemes (such as labor-managed firms, bargaining models etc.).

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