Occupational Licensing and Skills Mismatches Among Immigrants and Natives in the United States

Abstract

Abstract This paper studies the effect of occupational licensing on the education-occupation mismatches and the logarithm of hourly wages of natives and immigrants in the United States using longitudinal data from the 2014 sample of the Survey of Income and Program Participation (SIPP). On average, licensing reduces the skills mismatch and raises hourly wages among natives but not among immigrants. Over time there is only minimal convergence between the outcomes experienced by licensed natives and immigrants, highlighting that licensing does not produce uniform benefits, by immigrant status. Rather, it appears to institutionalize substantive differences in the quality of the skill matches and hourly pay of native and immigrant licensed workers and professionals.