Certifiably employable? Occupational regulation and unemployment duration

Occupational regulation is a labor market institution that has received a growing amount of attention. However, there is a gap in the literature regarding the relationship between occupational credentials and unemployment duration in the United States. Thus, we propose a random search model to expla...

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Bibliographic Details
Published in:Southern economic journal 2024-04, Vol.90 (4), p.1035-1059
Main Authors: Kukaev, Ilya, Timmons, Edward J.
Format: Article
Language:English
Subjects:
Black people
Certification
Credentials
Human capital
Labor market
Licensing
Males
Panel data
Policy making
Regulation
Unemployment
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Summary:Occupational regulation is a labor market institution that has received a growing amount of attention. However, there is a gap in the literature regarding the relationship between occupational credentials and unemployment duration in the United States. Thus, we propose a random search model to explain differences in unemployment duration resulting from heterogeneous effects from licenses and certification. Our model predicts that an occupational credential with a stronger signaling/human capital effect results in a shorter individual unemployment duration. To estimate the relationship between occupational credentials and spells of unemployment, we perform a survival analysis using panel data from the Survey of Income and Program Participation (SIPP) for the years 2013–2019. We find that both licensing and certification are associated with reductions in unemployment spells for Black males that are similar in magnitude. Our results provide some suggestive guidance to policymakers since certification is less costly and not mandatory like occupational licensing.
ISSN:0038-4038
2325-8012
DOI:10.1002/soej.12677