The effect of occupational licensing deregulation on migrants in the German skilled crafts sector

Article

Abstract

Occupational licensing on the national level reduces labor market prospects of individuals with a low likelihood of fulfilling the licensing requirements. Such regulation has the potential to adversely affect the labor market integration of foreign-born citizens and can be an obstacle to the free movement of labor toward its most productive uses. Before the backdrop of increased levels of migration into Germany, and the discussion about harmonizing labor standards in Europe, this paper empirically examines the effects of the deregulation of occupational licensing in the German crafts sector on the proportion of migrants working in this sector. The results suggest that the deregulation has increased the proportion of migrants among self-employed as well as employed craftsmen in the fully deregulated trades.

Keywords

Occupational licensing Migrants Germany Common market Deregulation 

JEL Classification

D45 K20 L51 

Supplementary material

10657_2018_9583_MOESM1_ESM.docx (20 kb)
Supplementary material 1 (DOCX 20 kb)
10657_2018_9583_MOESM2_ESM.docx (20 kb)
Supplementary material 1 (DOCX 20 kb)
10657_2018_9583_MOESM3_ESM.docx (20 kb)
Supplementary material 1 (DOCX 20 kb)
10657_2018_9583_MOESM4_ESM.docx (20 kb)
Supplementary material 1 (DOCX 20 kb)
10657_2018_9583_MOESM5_ESM.docx (20 kb)
Supplementary material 1 (DOCX 21 kb)

References

  1. BAMF. (2008). Schulische Bildung von Migranten in Deutschland. Integrationsreport, Teil 1. Bundesministerium für Migration und Flüchtlinge, working paper 13.Google Scholar
  2. Baycan-Levent, T., & Nijkamp, P. (2009). Characteristics of migrant entrepreneurship in Europe. Entrepreneurship and Regional Development, 21(4), 375–397.CrossRefGoogle Scholar
  3. Bertrand, M., Duflo, E., & Mullainathan, S. (2004). How much should we trust difference-in-difference estimates? Quarterly Journal of Economics, 119(1), 249–275.CrossRefGoogle Scholar
  4. Bian, Y. (1997). Bringing strong ties back in: Indirect ties, network bridges, and job searches in China. American Sociological Review, 62(3), 366–385.CrossRefGoogle Scholar
  5. Bildungsbericht. (2016). H-Bildung und migration. In Bildung in Deutschland. Ein indikatorengestützter Bericht mit einer Analyse zu Bildung und Migration, Bertelsmann, Bielefeld. ISBN 978-3-7639-5742-2.Google Scholar
  6. Blundell, R., & Costa, D. M. (2009). Alternative approaches to evaluation in empirical microeconomics. Journal of Human Resources, 44(3), 565–640.CrossRefGoogle Scholar
  7. Borjas, G. J. (2014). Immigration economics. Cambridge: Harvard University Press.CrossRefGoogle Scholar
  8. Branstetter, L., Lima, F., Taylor, L. J., & Venancio, A. (2014). Do entry regulations deter entrepreneurship and job creation? Evidence from recent reforms in Portugal. The Economic Journal, 124(577), 805–832.CrossRefGoogle Scholar
  9. Bulla, S. (2012). Ist das Berufszulassungsregime der Handwerksordnung noch verfassungsgemäß? Gewerbearchiv, 12, 470–476.Google Scholar
  10. Bundesagentur für Arbeit [BA]. (2016). Hintergrundinformation. Auswirkungen der Migration auf den deutschen Arbeitsmarkt. Nürnberg.Google Scholar
  11. Bundestag [German Parliament]. (2003a). Gesetz zur Änderung der Handwerksordnung und anderer handwerksrechtlicher Vorschriften. Bundestagsdrucksache, 15(1206), 4–46.Google Scholar
  12. Bundestag [German Parliament]. (2003b). Stellungnahme des Bundesrates zum Gesetz zur Änderung der Handwerksordnung und anderer handwerksrechtlicher Vorschriften. Bundestagsdrucksache 1.Google Scholar
  13. Bundestag [German Parliament]. (2011). Protokolle des Vermittlungsausschusses des Deutschen Bundestages und des Bundesrates für die 13. bis 15. Wahlperiode (1994 bis 2005): DVD-Edition der… mit Materialien zur Erschließung, C. H. Beck. ISBN 978-3406617997.Google Scholar
  14. Caliendo, M., & Künn, S. (2011). Start-up subsidies for the unemployed: Long-term evidence and effect heterogeneity. Journal of Public Economics, 95, 311–331.CrossRefGoogle Scholar
  15. Constant, A., & Zimmermann, K. (2006). The making of entrepreneurs in Germany: Are native men and immigrants alike? Small Business Economics, 26, 279–300.CrossRefGoogle Scholar
  16. Damelang, A., Haupt, A., & Abrahan, M. (2018). Economic consequences of occupational deregulation. Natural experiment in the German crafts. Acta Sociologica, 61(1), 34–49.CrossRefGoogle Scholar
  17. Domin, J.-P., & Marciano, A. (2013). How much should professional markets be regulated? An introduction. The European Journal of Comparative Economics, 10(2), 153–157.Google Scholar
  18. Dorsey, S. (1983). Occupational licensing and minorities. Law and Human Behavior, 7(2), 171–181.CrossRefGoogle Scholar
  19. European Commission. (2013). Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee on Evaluating National Regulations on Access to Professions, Brussels 2013, COM 2013/676 final 02 October 2013.Google Scholar
  20. Federal Assembly [Bundesrat]. (2003). Stenografischer Bericht, 795. Sitzung, Berlin, Friday Dec 19, 2003. Upper House of the German parliament.Google Scholar
  21. Federal Statistical Office. (2016). Produzierendes Gewerbe. Unternehmen, tätige Personen und Umsatz im Handwerk—Jahresergebnisse 2013. Fachserie 4, Reihe 7.2. Wiesbaden.Google Scholar
  22. Federman, M. N., Harrington, D. E., & Krynski, K. J. (2006). The impact of state licensing regulations on low-skilled immigrants: The case of Vietnamese Manicurists. American Economic Review, 96(2), 237–241.CrossRefGoogle Scholar
  23. Feldman, H. (2009). The effects of hiring and firing regulation on unemployment and employment: Evidence based in survey data. Applied Economics, 41(19), 2389–2401.CrossRefGoogle Scholar
  24. Feldmann, H. (2003). Labor market regulation and labor market performance: Evidence based on survey among senor business executives. Kyklos, 56(4), 509–540.CrossRefGoogle Scholar
  25. Feuerhake, J. (2012). Handwerkszählung 2008. Wirtschaft und Statistik, 1, 51–62.Google Scholar
  26. Fredriksen, K., Runst, P., & Bizer, K. (forthcoming). Masterful meisters? Voluntary certification and quality in the German crafts sector. German Economic Review.Google Scholar
  27. Gomez, R., Gunderson, M., Huang, X., & Zhang, T. (2015). Do immigrants gain or lose by occupational licensing? Canadian Public Policy, 41(supplement 1), 80–97.CrossRefGoogle Scholar
  28. Granovetter, M. (1973). The strength of weak ties. American Journal of Sociology, 78(6), 1360–1380.CrossRefGoogle Scholar
  29. Hawthorne, L. (2015). The impact of skilled migration on Foreign Qualification Recognition reform in Australia. Canadian Public Policy, 41(1), 173–185.CrossRefGoogle Scholar
  30. Kleiner, M. M. (2006). Licensing occupations. Ensuring quality or restricting competition?. Kalamazoo: W.E. Upjohn Institute for Employment Research.CrossRefGoogle Scholar
  31. Kleiner, M. M. (2015). Border battles: The influence of occupational licensing on interstate migration. Employment Research Newsletter, 22(4), 4–6.CrossRefGoogle Scholar
  32. Kleiner, M. M., Gay, R. S., & Greene, K. (1982). Barriers to labor migration: The case of occupational licensing. Industrial Relations, 21(3), 383–391.Google Scholar
  33. Kleiner, M. M., & Krueger, A. (2013). Analyzing the extent and influence of occupational licensing on the labor market. Journal of Labor Economics, 31(2/2), 173–202.CrossRefGoogle Scholar
  34. Koch, A., & Nielen, S. (2016). Ökonomische Effekte der Liberalisierung der Handwerksordnung von 2004, WISO Diskurs, 5/2016.Google Scholar
  35. Kogan, I. (2010). Anew immigrants—Old disadvantage patterns? Labour market integration of recent immigrants into Germany. International Migration, 49(1), 91–117.CrossRefGoogle Scholar
  36. Law, M. T., & Marks, M. S. (2009). Effects of occupational licensing laws on minorities: Evidence from the progressive era. Journal of Law and Economic, 52, 351–366.CrossRefGoogle Scholar
  37. Lergetporer, P., Ruhose, J., & Simon, L. (2016). Labor market effects of entry barriers to self-employment: Evidence from deregulating the German crafts sector. Ifo working paper—Ifo Center for the Economics of Education, Ifo Institute.Google Scholar
  38. May-Strobl, E. (2005). Die Ich-AG als neue Form der Existenzgründung aus der Arbeitslosigkeit. IfM Bonn.Google Scholar
  39. McDonald, J. T., Warman, C., & Worswick, C. (2015). Immigrant selection systems and occupational outcomes of international medical graduates in Canada and the United States. Canadian Public Policy, 41(Suppl 1), 116–137.CrossRefGoogle Scholar
  40. Minniti, M., & Wim, N. (2010). What do we know about the patterns and determinants of female entrepreneurship cross countries? The European Journal of Development Research, 22(3), 277–293.CrossRefGoogle Scholar
  41. Mueller, K. (2006). Erste Auswirkungen der Novelierung der Handwerksordnung von 2004, Göttinger Handwerkswirtschaftliche Studien, 74. Duderstadt: Mecke-Druck.Google Scholar
  42. Mueller, K. (2014). Stabilität und Ausbildungsbereitschaft von Existenzgründern im Handwerk, Göttinger Handwerkswirtschaftliche Studien, 94. Duderstadt: Mecke-Druck.Google Scholar
  43. Mueller, K. (2015). Strukturentwicklung im Handwerk, Göttinger Handwerkswirtschaftliche Studien, 98. Duderstadt: Mecke-Druck.Google Scholar
  44. OECD. (2017). International migration outlook 2017. Paris: OECD.CrossRefGoogle Scholar
  45. Ogus, A., & Zhang, Q. (2006). Licensing procedures in developing countries: Should they be part of the set-up process? International Journal of Public Administration, 29(12), 1091–1108.CrossRefGoogle Scholar
  46. Pashigian, P. B. (1979). Occupational licensing and the interstate mobility of professionals. The Journal of Law and Economics, 22(1), 1–25.CrossRefGoogle Scholar
  47. Philipsen, N. (2009). Regulation of liberal professions and competition policy: Developments in the EU and China. Journal of Competition Law & Economics, 6(2), 203–231.CrossRefGoogle Scholar
  48. Rostam-Afschar, D. (2014). Entry regulation and entrepreneurship: A natural experiment in German craftsmanship. Empirical Economics, 47, 1067–1101.CrossRefGoogle Scholar
  49. Runst, P., Thomä, J., Haverkamp, K., & Müller, K. (forthcoming). A replication of ‘Entry regulation and entrepreneurship: A natural experiment in German craftsmanship’. Empirical Economics.Google Scholar
  50. Shapiro, C. (1986). Investment, moral hazard, and occupational licensing. The Review of Economic Studies, 53(5), 843–862.CrossRefGoogle Scholar
  51. Svorny, S. (2000). Licensing, market entry regulation. Encyclopedia of law and economics.Google Scholar
  52. Williams, W. E. (1982). The state against Blacks. New York, NY: New Press.Google Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Economics Department, Institute for Small Business ResearchUniversity of GöttingenGöttingenGermany

Personalised recommendations