Book Review: Guild-Ridden Labor Markets by Morris M. Kleiner

Abstract

Much economic analysis tends to follow the herd: Is globalization or skill-biased technical change more responsible for the economic outcomes we see? Will higher minimum wages reduce employment? Such formulations are fine (and the questions they focus on are highly relevant), but sometimes they overlook the importance of other pervasive phenomena in the labor market. Consider the following: there are more dentists in the top 1 percent of the income distribution than there are software executives (Rothwell 2016). Morris Kleiner has done more than anyone else to investigate and call attention to a surprisingly widespread labor market institution: occupational licensing.In Guild-Ridden Labor Markets: The Curious Case of Occupational Licensing, Kleiner provides a nontechnical overview of research, much of it his own, on the incidence and impacts of licensure. He delineates the distinction between occupational licensing, which limits the ability of a worker to practice an occupation in the absence of a license, and certification, which merely restricts the use of a professional title. In occupations ranging from dentist to interior designer, Kleiner cites research showing that occupational licenses raise practitioner wages (and prices), lower geographic mobility, and yield indeterminate or minimal effects on quality or public safety.