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Kleiner, M.M. and Vorotnikov, E. (2012) Complementarity and Substitution between Licensed and Unlicensed Occupations: An Analysis of Architects and Interior Designers (Working Paper). University of Minnesota, Minnesota.

has been cited by the following article:

• TITLE: The Impact of Introducing Mandatory Occupational Licensing

  AUTHORS: Miana Plesca

  KEYWORDS: Occupation Licensing, Occupation Shortage, Deadweight Loss

  JOURNAL NAME: Modern Economy, Vol.6 No.12, December 29, 2015

  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.