IESET.
Hypotheses·labour·classical_occupational_licensing_consumer_loss_us_state_panel

Across US states 2000-2022, higher occupational-licensing intensity in licensed service sectors (proxied by share of state workforce requiring a state-issued license, derived from BLS Current Population Survey supplements) is associated with higher consumer prices in the affected service sectors and lower employment in those sectors, conditional on state per-capita income, demographic composition, and rural/urban share.

The Friedman 1962 / Kleiner- Krueger claim is that occupational-licensing operates as a barrier to entry that protects incumbent rents at consumer expense; the test is a panel of US states with state-and-year fixed effects on service-sector CPI sub-components.

INCONCLUSIVEengine/runs/classical_occupational_licensing_consumer_loss_us_state_panel

INCONCLUSIVE_DATA_PENDING — no outcome variable loaded; missing: ['bls:cpi_services_subindex', 'bls:ces_state_employment']

confidence cueResult card produced; verdict unclassified.

policy briefCoverage too thin

In ordinary language

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

This test cannot make a firm call yet. no outcome variable loaded; missing: ['bls:cpi_services_subindex', 'bls:ces_state_employment']

why it matters

Labor-market rules often help some workers while risking job loss or slower hiring for others. This test looks for that tradeoff in observable employment or unemployment data.

how the test works

It compares 1 country or place units from 2000 to 2022, using a panel fe design, with fixed effects for state and year.

what was measured
What changed
  • Licensing intensity state
What we checked
  • Services cpi state level
  • Licensed sector employment share
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/classical_occupational_licensing_consumer_loss_us_state_panel
1007550250200020112022USA
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show services_cpi_state_level across 1 sampled countries over 2000–2022.
The shapes above are stylised — none of the lines are real data.
Placeholder for classical_occupational_licensing_consumer_loss_us_state_panel. Published chart will be generated from engine/runs/classical_occupational_licensing_consumer_loss_us_state_panel/chart_data.json.

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-06-29T17:53:33Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

Across US states 2000-2022, higher occupational-licensing intensity in licensed service sectors (proxied by share of state workforce requiring a state-issued license, derived from BLS Current Population Survey supplements) is associated with higher consumer prices in the affected service sectors and lower employment in those sectors, conditional on state per-capita income, demographic composition, and rural/urban share. The Friedman 1962 / Kleiner- Krueger claim is that occupational-licensing operates as a barrier to entry that protects incumbent rents at consumer expense; the test is a panel of US states with state-and-year fixed effects on service-sector CPI sub-components.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

SUPPORTED if both (a) panel-FE coefficient on licensing intensity is positive and significant at p<0.05 on services CPI growth, AND (b) the coefficient on licensed-sector employment share is negative and significant at p<0.10 (mechanism check). PARTIAL if only (a) holds. REFUTED if (a) is wrong-signed at p<0.05 or insignificant. INFORMATIVE: the coefficient should be larger when restricted to 2015-2022 (better-measured licensing data); if it shrinks substantially in that window, the headline result is partly an artefact of the noisy historical series.

formal test & threshold
test:      state_panel_fe_licensing_on_cpi_and_employment
threshold: PRIMARY: panel_FE_beta(licensing_intensity, services_CPI) > 0 at p<0.05 AND panel_FE_beta(licensing_intensity, licensed_sector_employment) < 0 at p<0.10. INFORMATIVE: 2015-2022 sub-sample coefficient retains >=70% of full-sample magnitude.

Method

Template
panel_fe
Fixed effects
state, year
Clustering
state
Sample
1 countries · 2000 – 2022
Evidence type
associational

Two-way FE panel with state and year fixed effects, standard errors clustered by state. Identification from within-state variation in licensing intensity over 2000-2022. Pre-2015 licensing intensity is measured with substantial error; robustness check restricts to 2015-2022. Spec acknowledges the licensing-intensity measure is noisier than the outcome measures.

Data

VariableSourceTransform
services_cpi_state_level
outcome
bls:cpi_services_subindextier 1
yoy_pct_change
licensed_sector_employment_share
outcome
bls:ces_state_employmenttier 1
share_of_total_state_employment
licensing_intensity_state
treatment
bls:cps_licensing_supplementtier 1
share_of_workforce_requiring_state_license
state_real_pc_income
control
fred:state_personal_income_per_capitatier 1
log_real
state_unemployment_rate
control
fred:state_unemployment_ratetier 1
level
state_population_density
control
fred:state_populationtier 1
log_per_sqkm

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — classical_occupational_licensing_consumer_loss_us_state_panel

Verdict: INCONCLUSIVE_DATA_PENDING — no outcome variable loaded; missing: ['bls:cpi_services_subindex', 'bls:ces_state_employment']

Pre-registration

  • Claim: Across US states 2000-2022, higher occupational-licensing intensity in licensed service sectors (proxied by share of state workforce requiring a state-issued license, derived from BLS Current Population Survey supplements) is associated with higher consumer prices in the affected service sectors and lower employment in those sectors, conditional on state per-capita income, demographic composition, and rural/urban share. The Friedman 1962 / Kleiner- Krueger claim is that occupational-licensing operates as a barrier to entry that protects incumbent rents at consumer expense; the test is a panel of US states with state-and-year fixed effects on service-sector CPI sub-components.
  • Falsification rule: SUPPORTED if both (a) panel-FE coefficient on licensing intensity is positive and significant at p<0.05 on services CPI growth, AND (b) the coefficient on licensed-sector employment share is negative and significant at p<0.10 (mechanism check). PARTIAL if only (a) holds. REFUTED if (a) is wrong-signed at p<0.05 or insignificant. INFORMATIVE: the coefficient should be larger when restricted to 2015-2022 (better-measured licensing data); if it shrinks substantially in that window, the headline result is partly an artefact of the noisy historical series.
  • Falsification test: state_panel_fe_licensing_on_cpi_and_employment

Estimate

  • Error: no outcome variable loaded; missing: ['bls:cpi_services_subindex', 'bls:ces_state_employment']

Variables resolved

  • bls:cps_licensing_supplement → licensing_intensity_state (treatment, publisher=constructed, n=23)

Variables missing data

  • bls:cpi_services_subindex (outcome, name=services_cpi_state_level) — vintage not on disk
  • bls:ces_state_employment (outcome, name=licensed_sector_employment_share) — vintage not on disk
  • fred:state_personal_income_per_capita (controls, name=state_real_pc_income) — vintage not on disk
  • fred:state_unemployment_rate (controls, name=state_unemployment_rate) — vintage not on disk
  • fred:state_population (controls, name=state_population_density) — vintage not on disk

Generated by scripts/run_panel_fe.py at 2026-06-29T17:53:33+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Friedman's "Capitalism and Freedom" 1962 chapter on occupational licensure is the canonical statement. Kleiner-Krueger 2013 is the modern empirical update. v2 should use a regression- discontinuity design on state-level licensing-reform episodes (Arizona Universal Recognition Act 2019, etc.) once event dates are reliably codified.

Authored framework. Read the transparency note.