Nearly a quarter of American workers need a government-issued license to do their jobs, a significant increase from 5% in 1950. Of these licensed occupations, which range from barbers to physicians, over three quarters require occupation-specific coursework. While such mandates aim to ensure a baseline level of competency, they may also limit workers’ occupational mobility: the ability to move between different occupations over the course of a career and reduce the earnings premium that licenses typically confer.
In this paper, the authors examine how occupation-specific education shapes workers’ career trajectories, skills, and earnings. They focus on the staggered introduction of the “150-hour rule,” which was rolled out across states throughout the 1990s and 2000s and required Certified Public Accountants (CPAs) to complete 30 additional credit hours before licensure. While all states eventually adopted the 150-hour rule, they differed in how they allocated the additional 30 hours. Some states (e.g., Alaska and New York) kept accounting-specific requirements unchanged, allowing students to fill the extra hours with any coursework. Others (e.g., California and Florida) increased accounting-specific requirements. This variation creates a natural experiment: a research setting in which an external event or policy change creates variation that mimics random assignment, allowing researchers to study causal effects without a controlled trial in the intensity of mandated occupation-specific education.
Using administrative licensing records from the National Association of State Boards of Accountancy (NASBA) matched to LinkedIn career data from Revelio Labs, which includes employment history and estimated salaries, the authors track how CPAs’ careers unfold depending on whether they faced stricter accounting-specific coursework requirements. They validate their earnings findings using actual wage data from the Current Population Survey. The authors find the following:
- An increase in required accounting-specific credits leads to a higher share of accounting positions in a worker’s post-licensure career. A one-standard-deviation increase leads to a 2-3 percentage point increase (5-6% relative to the mean) in the share of positions held in accounting roles. This effect is not explained by a greater volume of shorter-tenured accounting positions, as the total time workers spend in accounting-specific positions also increases. The effect materializes across horizons of five years post-licensure, ten years post-licensure, and a worker’s entire career.
- Occupation-specific education increases human capital: the skills, knowledge, and experience that workers accumulate and that contribute to their productivity within an occupation but decreases the portability of skills across occupations. An increase in accounting-specific credits leads to more overall job switching, but conditional on changing jobs, CPAs are more likely to switch into accounting roles and less likely to switch to non-accounting roles.
- Accounting-specific credit requirements reduce the licensing premium earned by CPAs. A one-standard-deviation change leads to a 2-5% decrease in average earnings, with the penalty attenuating over longer horizons.
- Workers subject to higher accounting-specific credit requirements are, if anything, more likely to be promoted to senior positions.
- The requirements do not necessarily produce better accountants, just more specialized ones. The total number of misconduct cases and CPA exam performance do not significantly change, but the skills listed on workers’ LinkedIn profiles become more concentrated, particularly in accounting and financial reporting.
- Minority workers bore the greatest costs. The negative effects on mobility and earnings were most pronounced for underrepresented minority CPAs, potentially perpetuating labor market inequities.
- The findings generalize beyond accounting. Across 17 additional licensed occupations, coursework requirements show a similarly negative association with occupational mobility. The effect is strongest when coursework requirements are layered on top of other quality-assurance mechanisms such as degree and exam requirements—suggesting that occupation-specific education limits workers’ outside opportunities, especially when the licensing regime already ensures a baseline level of quality.
This research has direct implications for policy. Amid a nationwide shortage of accountants, several states have begun rolling back the 150-hour rule to reduce barriers to entry. This research suggests that how states structure their requirements matters as much as the total hours required. Mandating more occupation-specific coursework creates what the authors call “occupational silos,” trapping workers in narrow career paths and weakening their bargaining position with employers.