Unique Institutions in Unique Places: A Look at the Effects of Occupational Licensing in Indian Country

Abstract

Recent studies have shown that occupational licensing is an important, measurable, labor market institution associated with 18 percent higher wages. However, a gap in the research exists as it applies to American Indian Country. This gap is partially due to tribal sovereignty, which prevents uniform application of state level licensure laws from applying to American Indian Country. Our research sought to investigate this gap by employing a mixed methods approach. We first looked at the experiences of American Indians as it pertains to occupational licensing for mental health within the Minnesota Ojibwe Tribe, finding a gradual increase of licensure and an associated decrease in service complaints. Secondly, we examined the effects of occupational licensing and location (on American Indian Territory or not) for Non-Hispanic Whites and American Indians as well as by Gender. First, we found a positive effect on both labor force participation and earnings associated with licensing. Secondly, we saw a negative penalty on both labor force participation and earnings for living in a homeland. Thirdly, the effects of licensing with a Homeland are a significant only for women and white men. Our findings suggest that further research should be focused on the effects of licensing within an Indian Reservation instead of using a proxy such as the Homeland Variable. We also find that a close examination of winners and losers, focusing on barriers to entry, should take place. Finally, we find that labor force participation and earnings are not as great for American Indians as has been found for the broader population previously.