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VAM-Velferd, arbeid og migrasjon

Income inequality in professional and vocational occupations

Alternative title: Yrkesbasert inntektsulikhet i Norge

Awarded: NOK 5.0 mill.

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2014 - 2017

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The project entitled "Income Inequality in Professional and Vocational Occupations" (IIPVO) has investigated the significance of occupational closure for wage inequality in Norway, both between and within occupations and across social groups. Occupational closure denote strategies aimed at producing social and legal entry barriers to occupations that will raise the rewards of their members and to generate higher wages than the ones available in the absence of closure. We have documented the existence of any legal regulations or opportunities for voluntary certification for all occupational titles in the Norway. We have also gathered statistics on the share of union members per occupation and the linkage between an occupation and the educational type of its incumbents. These four, licensure, certification, unionization and credentialization, are measures of occupational closure used in the analyses of wages and employment outcomes. The data set on licensure and certification are available to other researchers. Licensed occupations have higher mean wages compared to occupations without licensure requirements. Moreover, union density is positively associated with a higher wage level. The impact of licensure on wages are stronger in the higher social classes, and the impact of union density is strongest among the lower classes. This means that licensure tend to increase wage differences, whereas union density tend to reduce differences. Credentialization does not affect the wage level, and the results for certification is mixed. Wage inequality in Norway has increased from 2003 to 2012, both between- and within-occupations. The between-occupational wage differences display the largest increase, which means that occupations have become a more important predictor of wages. Licensure and credentialization has only a very limited role in the development of wage inequality, whereas high union density attenuates the increase in inequality in the lower end of the wage distribution. Does licensure increase wages, or is higher paying occupations more often licensed? We try to disentangle these two possibilities by examining the wage trajectories of eleven professions in the private and public sectors that became licensed in the 2000s. The results are mixed. Hence, we cannot conclude that licensure will cause a rise in wages. Employees in licensed occupations have lower mobility in the labor market compared to other workers, while workers in certified occupations have higher mobility rates. We believe this is because workers in licensed professions receive greater benefits, in terms of wages and job security, from remaining in the occupation, whereas certification is a way to document expertise outside the regular education system and can promote occupational mobility. An important aspect of the IIPVO-project has been to investigate the consequences of occupational closure for immigrants' wage earnings. Our research show that the wages of employees with immigrant and majority origin are more similar in licensed and unionized occupations, while neither certification nor credentialization equalizes earnings among immigrants and the majority population. Hence, it is important to ensure immigrants have equal access to licensed occupations. However, immigrants have a slightly lower probability of getting a job in a licensed profession, especially if they have a foreign education, but this does not apply to immigrants from other Nordic or EEA-countries who are part of an EU-internal labour market. This indicates that common labour market agreements facilitate mobility within the contracting states, whereas access is more troublesome for immigrants who are not a part of the negotiated agreement for transfer of professional credentials. A third aspect of the IIPVO-project is to investigate how unions and professional associations negotiate closure processes. We seek to understand how these associations and unions navigate and manage professional interest, which strategies are pursued and how these are justified, including analyzing the sources of closure. A study of the teacher's union show that the union does not pursue strategies that will lead to a restriction on the number of teachers, for example higher GPA for admission to teacher education or certification programmes for teachers. Hence, policies that could indirectly increase wages through restriction of supply is not supported. Instead, increased service quality and autonomy seem to be an important motivation. We have presented our research at national and international conferences. We arranged a PhD-workshop with the expert panel and eight PhD-students from three countries in 2016. We have published five articles/book chapters from the project in national and international publication outlets. Three articles are under review and another three working papers are in progress. Project web-page:

This project proposal is for the young researchers' grant. It investigates the link between occupational closure and income inequality in Norway, and it examines how this connects with social inequality. Institutional inequality is of great academic, poli tical and societal interest and controversy, and it relates to ethnic inequality, social class inequality and the gender pay gap. More knowledge is needed in order to understand whether and to what extent wage levels are affected by occupational closure. Little attention has been paid to how occupational groups are internally structured with regard to equality among incumbents. The project will seek to investigate whether processes of occupational closure create inclusionary and exclusionary mechanisms in the labor market relating to ethnicity, immigrant status and social class background. The mechanisms underlying occupational closure might interact with other bases of exclusion such as social class background, immigrant status and ethnic origin, in ways that could reduce inequality on basis of personal characteristics. This side of closure theory is highly underdeveloped. This project will combine quantitative and qualitative methods to do innovative empirical research and groundbreaking theory developm ent. Because the topic of interest is structural, administrative register data is used with great benefit. The research question concerns the impact closure strategies have on the overall distribution of incomes both between and within occupations, and ho w unions and associations negotiate closure practices. The qualitative work are comparative and seek to understand how associations and unions navigate and manage professional interest, which strategies are pursued, how these are justified, including anal yzing the sources of closure, and what the ultimate aim is. It will give authorities and unions knowledge about the consequences of (de)regulation of occupations and increasing skills demands for wages.

Publications from Cristin

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VAM-Velferd, arbeid og migrasjon