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Working Paper
Interlocked Executives and Insider Board Members: An Empirical Analysis
This paper asked the question of whether the behavior and compensation of interlocked executives and non-independent board of directors are consistent with the hypothesis of governance problem or whether this problem is mitigated by implicit and market incentives. It then analyzes the role of independent board of directors. Empirically, we cannot reject the hypothesis that executives in companies with a large number of non-independent directors on the board receive the same expected compensation as other executives. In our model, every executive has an incentive to work. Placing more of ...
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Analyzing the Effects of Occupational Licensing on Earnings Inequality in the United States
There is a consensus that there is an earnings premium for licensed workers relative to unlicensed workers. However, little is known about how occupational licensing affects earnings inequality. In this paper, we study dynamic, heterogeneous earnings effects of occupational licensing and draw implications for earnings inequality in the United States. First, we find that the earnings gap between workers in licensed occupations and those in unlicensed occupations with similar characteristics (“licensing premium”) increased slightly during the 1983–2019 period. Second, we find that the ...
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Does Universal Occupational Licensing Recognition Improve Patient Access? Evidence from Healthcare Utilization
Optimizing physician labor supply has been an important policy issue in healthcare in the United States. One of the proposed solutions has been the universal licensing recognition (ULR), which allows out-of-state physicians to provide healthcare services without relicensing and increases the local labor supply of physicians. There has been no empirical analysis of the effect of such regulatory relaxation on the local labor supply and subsequent improvements of consumer welfare. In this study, we use the Behavioral Risk Factor Surveillance System to investigate the effect of universal ...
Working Paper
Between College and That First Job: Designing and Evaluating Policies for Hiring Diversity
Despite widespread caste disparities, compensatory hiring policies remain absent from the Indian private sector. This paper employs novel administrative data on the job search from an elite college and evaluates policies to promote hiring diversity. Application reading, written aptitude tests, large group debates, and job choices do not explain caste disparities. Disparities arise primarily between the final round, comprising non-technical personal interviews, and job offers; the emergence closely parallels caste revelation. For promoting diversity, hiring subsidies — similar in spirit to ...
Working Paper
Allocating Effort and Talent in Professional Labor Markets
In many professional service firms, new associates work long hours while competing in up-or-out promotion contests. Our model explores why these firms require young professionals to take on heavy work loads while simultaneously facing significant risks of dismissal. We argue that the productivity of skilled partners in professional service firms (e.g. law, consulting, investment banking and public accounting) is quite large relative to the productivity of their peers who are competent and experienced but not well-suited to the partner role. Therefore, these firms adopt personnel policies that ...
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The Influence of Occupational Licensing on Workforce Transitions to Retirement
Ways of leaving the labor force has been an understudied aspect of labor market outcomes. Labor market institutions such as occupational licensing may influence how individuals transition to retirement. When and how workers transition from career jobs to full retirement may contribute to pre- and post-retirement well-being. Previous investigations of retirement pathways focused on the patterns and outcomes of retirement transitions, yet the influence of occupational licensing on retirement transition has not been analyzed. In this study, we use the Current Population Survey and Survey of ...
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Occupational Licensing and Labor Market Fluidity
We show that occupational licensing has significant negative effects on labor market fluidity defined as cross-occupation mobility. Using a balanced panel of workers constructed from the CPS and SIPP data, we analyze the link between occupational licensing and labor market outcomes. We find that workers with a government-issued occupational license experience churn rates significantly lower than those of non-licensed workers. Specifically, licensed workers are 24% less likely to switch occupations and 3% less likely to become unemployed in the following year. Moreover, occupational licensing ...
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Is Occupational Licensing a Barrier to Interstate Migration?
Occupational licensure, one of the most significant labor market regulations in the United States, may restrict the interstate movement of workers. We analyze the interstate migration of 22 licensed occupations. Using an empirical strategy that controls for unobservable characteristics that drive long-distance moves, we find that the between-state migration rate for individuals in occupations with state-specific licensing exam requirements is 36 percent lower relative to members of other occupations. Members of licensed occupations with national licensing exams show no evidence of limited ...
Working Paper
Foreign nurse importation to the United States and the supply of native registered nurses
Importing foreign nurses has been used as a strategy to ease nursing shortages in the United States. The effectiveness of this policy critically depends on the long-run response of native-born nurses. We examine how the immigration of foreign-born registered nurses (RNs) affects the occupational choice and long-run employment decisions of native RNs. Using a variety of empirical strategies that exploit the geographical distribution of immigrant nurses across U.S. cities, we find evidence of large displacement effects?over a 10-year period, for every foreign nurse that migrates to a city, ...
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The Labor Market Effects of Occupational Licensing in the Public Sector
In the U.S., occupational licensing is more prevalent in the public sector than in the private sector, but the influence of occupational regulation for public sector workers has not been analyzed in detail. Our study initially examines the probability of a licensed worker selecting into the public sector. Using the probability as a control for these individuals’ risk aversion, we next examine how licensing impacts key labor market outcomes, such as wages, hours worked, and employment in the public sector. Our results show that having an occupational license increases the likelihood of ...