Income inequality in professional and vocational occupations

WP 1: Between Occupation Wage Inequality

Researchers: Ida Drange, Håvard Helland and Thijs Bol.

Income inequality in Norway is increasing, although at a modest rate compared with other
economies. The usual explanations for rising inequality points to destruction of rents at the lower end of the income distribution, i.e. decrease in unionization, globalization of labor and lack of collective bargaining agreements, or accruing rents generated at the top end of the income distribution, by institutions such as educational credentialing, occupational closure and managerial rents.

For the United States and Britain, the increase in income inequality is largely caused by a rise in between occupation inequality. Scholars within the field of sociology have pointed to occupational closure in order to explain occupational wage inequality. The basic argument is that some occupations pay more than others do because they are better able to establish and maintain institutional barriers to access. This research is pioneered Kim Weeden, who showed that licensure, educational credentials and unionization generate economic rents in the US labor market. Since then, research has documented wage effects of occupational closure in both UK and Germany.

The following questions are asked in this work package: How does closure shape the
occupational wage distribution in Norway, and how does this as an effect shape the societal wage distribution? What is the relative impact of the different strategies? Is the effect of these
strategies identical across industries and sectors and across the skills level structure?
Do recently regulated occupations collect monopoly rents from their labor at the same
level as established occupations and professions?