David Wessel at the Wall Street Journal reports that President Obama will nominate Alan Krueger to be the new head of the CEA. It’s interesting to note that, among his other areas of research, Krueger done important work on occupational licensing. Here is a paper he co-authored with Morris Kleiner showing that 35% of jobs are licensed or certified by the government. There they report:

Our estimates of the relationship of occupational licensing and wages is consistent with the hypothesized role by members of an occupation to raise wages by using the powers of government to drive up requirements and capture work for the regulated workers for larger geographic areas. These estimates suggest a strong role for the monopoly face of licensing in the labor market. Indeed, the wage premium associated with licensing is strikingly similar to that found in studies of the effect of unions on wages.

And here is an earlier paper, also with Kleiner, on the same. If one is concerned about lowering the long-term unemployment rate, improving the functioning of labor markets, and making it easier for workers to enter into more skilled service jobs, occupational licensing is a good place to look.

Wessel also notes that Carl Shapiro is also being nominated to the CEA. Importantly, Shapiro has done work on patents and antitrust. Here is a summary of a relevant paper:

Economists and policy makers have long recognized that innovators must be able to appropriate a reasonable portion of the social benefits of their innovations if innovation is to be suitably rewarded and encouraged. However, this paper identifies a number of specific fact patterns under which the current U.S. patent system allows patent holders to capture private rewards that exceed their social contributions. Such excessive patentee rewards are socially costly, since they raise the deadweight loss associated with the patent system and discourage innovation by others. Economic efficiency is promoted if rewards to patent holders are aligned with and do not exceed their social contributions. This paper analyzes two major reforms to the patent system designed to spur innovation by better aligning the rewards and contributions of patent holders: establishing an independent invention defense in patent infringement cases, and strengthening the procedures by which patents are re-examined after they are issued. Three additional reforms relating to patent litigation are also studied: limiting the use of injunctions, clarifying the way in which “reasonable royalties” are calculated, and narrowing the definition of “willful infringement.”

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