Creator: Gittleman, Maury B., Klee, Mark A., and Kleiner, Morris Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 504 Abstract:
Recent assessments of occupational licensing have shown varying effects of the institution on labor market outcomes. This study revisits the relationship between occupational licensing and labor market outcomes by analyzing a new topical module to the Survey of Income and Program Participation (SIPP). Relative to previously available data, the topical module offers more detailed information on occupational licensing from government, with a larger sample size and access to a richer set of person-level characteristics. We exploit this larger and more detailed data set to examine the labor market outcomes of occupational licensing and how workers obtain these licenses from government. More specifically, we analyze whether there is evidence of a licensing wage premium, and how this premium varies with aspects of the regulatory regime such as the requirements to obtain a license or certification and the level of government oversight. After controlling for observable heterogeneity, including occupational status, we find that those with a license earn higher pay, are more likely to be employed, and have a higher probability of retirement and pension plan offers.
Keyword: Non-wage benefits , Wages, and Occupational licensing Subject (JEL): J30 - Wages, Compensation, and Labor Costs: General, J44 - Professional Labor Markets; Occupational Licensing, and L50 - Regulation and Industrial Policy: General
Creator: Hopenhayn, Hugo Andres, Llobet, Gerard, and Mitchell, Matt Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 273 Abstract:
This paper presents a model of cumulative innovation where firms are heterogeneous in their research ability. We study the optimal reward policy when the quality of the ideas and their subsequent development effort are private information. The optimal assignment of property rights must counterbalance the incentives of current and future innovators. The resulting mechanism resembles a menu of patents that have infinite duration and fixed scope, where the latter increases in the value of the idea. Finally, we provide a way to implement this patent menu by using a simple buyout scheme: The innovator commits at the outset to a price ceiling at which he will sell his rights to a future inventor. By paying a larger fee initially, a higher price ceiling is obtained. Any subsequent innovator must pay this price and purchase its own buyout fee contract.
Keyword: Patents, Innovation, Sequential Innovation, Asymmetric Information, Policy, Compulsory Licensing, and Mechanism Design Subject (JEL): D82 - Asymmetric and Private Information; Mechanism Design, H41 - Public Goods, O31 - Innovation and Invention: Processes and Incentives, L50 - Regulation and Industrial Policy: General, D43 - Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection, K23 - Regulated Industries and Administrative Law, and L51 - Economics of Regulation