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The Influence of Occupational Licensing on Workforce Transitions to Retirement

Author

Listed:
  • Morris M. Kleiner
  • Yun Taek Oh

Abstract

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 Income and Program Participation to investigate how occupational licensing influences American later-career workers’ choice of retirement pathways. Our results show that licensed workers are less likely to choose to change careers but more likely to reduce work hours in transitioning out of the workforce. These results are consistent with the findings that licensed workers receive more benefits in the form of preferable retirement options, suggesting that these workers tend to have higher wages, benefits, and flexibility even toward the end of their careers.

Suggested Citation

  • Morris M. Kleiner & Yun Taek Oh, 2024. "The Influence of Occupational Licensing on Workforce Transitions to Retirement," Staff Report 657, Federal Reserve Bank of Minneapolis.
    • Handle: RePEc:fip:fedmsr:98382
    DOI: 10.21034/sr.657
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    References listed on IDEAS

    as
    1. Chris Robinson, 2018. "Occupational Mobility, Occupation Distance, and Specific Human Capital," Journal of Human Resources, University of Wisconsin Press, vol. 53(2), pages 513-551.
    2. Lancaster, Tony, 2000. "The incidental parameter problem since 1948," Journal of Econometrics, Elsevier, vol. 95(2), pages 391-413, April.
    3. Ruhm, Christopher J, 1990. "Bridge Jobs and Partial Retirement," Journal of Labor Economics, University of Chicago Press, vol. 8(4), pages 482-501, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Public policy; Retirement plans; Occupational licensing;
    All these keywords.

    JEL classification:

    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy

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