IESET.
Hypotheses·regulatory·licensing_burden_income_mobility

Across US states and a cross-country panel of OECD and middle- income economies 1980-2020, higher occupational and business licensing burdens predict weaker entrepreneurship rates and lower intergenerational income mobility over long horizons.

The pre- registered claim is that a one-standard-deviation increase in licensing burden is associated with at least a 3-percentage-point reduction in the share of children born to bottom-quintile parents who reach the top quintile, and with at least a 10% reduction in the firm-formation rate, after controlling for education, racial composition, and manufacturing share.

INCONCLUSIVEengine/runs/licensing_burden_income_mobility

INCONCLUSIVE_DATA_PENDING — no outcome variable loaded; missing: ['academic:chetty_hendren_kline_saez_igmb', 'bls:business_dynamics_statistics_firm_births', 'bls:cps_self_employment']

confidence cueResult card produced; verdict unclassified.

policy briefCoverage too thin

In ordinary language

Do children have a better shot at moving up when schools, housing, and neighborhoods give them access to opportunity, rather than simply because a country redistributes more income?

plain answer

This test cannot make a firm call yet. no outcome variable loaded; missing: ['academic:chetty_hendren_kline_saez_igmb', 'bls:business_dynamics_statistics_firm_births', 'bls:cps_self_employment']

why it matters

This matters because regulatory claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 1 country or place units from 1980 to 2020, using a panel fe design, with fixed effects for state and year.

what was measured
What changed
  • Occupational licensing burden index
  • Business regulatory burden
What we checked
  • Intergenerational income mobility
  • Firm formation rate
  • Self 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/licensing_burden_income_mobility
1007550250198020002020USA
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show intergenerational_income_mobility across 1 sampled countries over 1980–2020.
The shapes above are stylised — none of the lines are real data.
Placeholder for licensing_burden_income_mobility. Published chart will be generated from engine/runs/licensing_burden_income_mobility/chart_data.json.

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-06-29T17:54:30Z
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 and a cross-country panel of OECD and middle- income economies 1980-2020, higher occupational and business licensing burdens predict weaker entrepreneurship rates and lower intergenerational income mobility over long horizons. The pre- registered claim is that a one-standard-deviation increase in licensing burden is associated with at least a 3-percentage-point reduction in the share of children born to bottom-quintile parents who reach the top quintile, and with at least a 10% reduction in the firm-formation rate, after controlling for education, racial composition, and manufacturing share.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Not supported if (a) the panel-FE coefficient on licensing burden is not negative and significant at p<0.05 on either mobility or firm formation, OR (b) the implied effect of a one-SD licensing increase on absolute upward mobility is less than 1.5 percentage points, OR (c) the coefficient flips to positive when state time trends are included (suggesting reverse causation: richer states regulate more). A public-interest / consumer-protection reading wins if licensing is positively associated with income or health outcomes.

formal test & threshold
test:      panel_fe_licensing_burden_on_mobility_and_entrepreneurship
threshold: panel_FE_beta(licensing → absolute_upward_mobility) < 0 at p<0.05 AND |effect_per_1sd_licensing_increase| >= 1.5 pp on mobility AND panel_FE_beta(licensing → firm_formation_rate) < 0 at p<0.05

Method

Template
panel_fe
Fixed effects
state, year
Clustering
state
Sample
1 countries · 1980 – 2020
Evidence type
associational

US state-year panel with state and year FE. Identification from within-state changes in licensing prevalence (e.g. Arizona 2010s reform waves, California's steady expansion). Robustness: cross-sectional long-difference (1980 vs 2020); instrument using national occupational-licensing trend interacted with state baseline industry composition (Bartik- style). Secondary: international cross-country regression using OECD PMR entry-barrier sub-index as licensing proxy.

Data

VariableSourceTransform
intergenerational_income_mobility
outcome
academic:chetty_hendren_kline_saez_igmbtier 4
level
firm_formation_rate
outcome
bls:business_dynamics_statistics_firm_birthstier 1
per_1000_working_age
self_employment_share
outcome
bls:cps_self_employmenttier 1
level
occupational_licensing_burden_index
treatment
academic:kleiner_krueger_occupational_licensing_state_paneltier 4
level
business_regulatory_burden
treatment
fraser_efw:regulationtier 4
level
college_attainment_share
control
us_census:acs_bachelor_degreetier 1
level
black_population_share
control
us_census:decennial_racetier 1
level
manufacturing_employment_share
control
bls:qcew_manufacturingtier 1
level
median_household_income
control
us_census:acs_median_household_incometier 1
log
income_inequality_gini
control
us_census:acs_ginitier 1
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — licensing_burden_income_mobility

Verdict: INCONCLUSIVE_DATA_PENDING — no outcome variable loaded; missing: ['academic:chetty_hendren_kline_saez_igmb', 'bls:business_dynamics_statistics_firm_births', 'bls:cps_self_employment']

Pre-registration

  • Claim: Across US states and a cross-country panel of OECD and middle- income economies 1980-2020, higher occupational and business licensing burdens predict weaker entrepreneurship rates and lower intergenerational income mobility over long horizons. The pre- registered claim is that a one-standard-deviation increase in licensing burden is associated with at least a 3-percentage-point reduction in the share of children born to bottom-quintile parents who reach the top quintile, and with at least a 10% reduction in the firm-formation rate, after controlling for education, racial composition, and manufacturing share.
  • Falsification rule: Not supported if (a) the panel-FE coefficient on licensing burden is not negative and significant at p<0.05 on either mobility or firm formation, OR (b) the implied effect of a one-SD licensing increase on absolute upward mobility is less than 1.5 percentage points, OR (c) the coefficient flips to positive when state time trends are included (suggesting reverse causation: richer states regulate more). A public-interest / consumer-protection reading wins if licensing is positively associated with income or health outcomes.
  • Falsification test: panel_fe_licensing_burden_on_mobility_and_entrepreneurship

Estimate

  • Error: no outcome variable loaded; missing: ['academic:chetty_hendren_kline_saez_igmb', 'bls:business_dynamics_statistics_firm_births', 'bls:cps_self_employment']

Variables resolved

  • fraser_efw:regulation → business_regulatory_burden (treatment, publisher=fraser_efw, n=4718)

Variables missing data

  • academic:chetty_hendren_kline_saez_igmb (outcome, name=intergenerational_income_mobility) — vintage not on disk
  • bls:business_dynamics_statistics_firm_births (outcome, name=firm_formation_rate) — vintage not on disk
  • bls:cps_self_employment (outcome, name=self_employment_share) — vintage not on disk
  • academic:kleiner_krueger_occupational_licensing_state_panel (treatment, name=occupational_licensing_burden_index) — vintage not on disk
  • census:acs_bachelor_degree (controls, name=college_attainment_share) — vintage not on disk
  • census:decennial_race (controls, name=black_population_share) — vintage not on disk
  • bls:qcew_manufacturing (controls, name=manufacturing_employment_share) — vintage not on disk
  • census:acs_median_household_income (controls, name=median_household_income) — vintage not on disk
  • census:acs_gini (controls, name=income_inequality_gini) — vintage not on disk

Generated by scripts/run_panel_fe.py at 2026-06-29T17:54:30+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

Chetty et al. mobility data is available at commuting-zone level (1980-2012 birth cohorts). State-level aggregation is straightforward but loses precision. The cross-country extension is flagged as a secondary spec due to data availability.

Authored framework. Read the transparency note.