We study the substitution between licensed and unlicensed workers and the quality effect of employing licensed professionals on firms. Leveraging a quasi-licensure mandate of the Sarbanes-Oxley Act (SOX) on audit committees of publicly-traded firms, this paper studies the employment spillover and quality effects of licensing at the firm level. Assembling multiple data sources, we identify independent directors with relevant licenses and the quality of accounting reports for more than 5,200 publicly-traded firms. Exploiting plausibly exogenous year-by-firm variation in fixed-effect models, the licensure mandate of SOX significantly increases the appointment of certified public accountants (CPAs) at the expense of other types of professionals at the board level. We find a precise zero effect for the presence of CPAs on audit committees on the need to refile financial statements.

Licensed workers could be shielded from unemployment during recession since occupational licensing laws are asymmetric—making unlicensed workers an illegal substitute for licensed workers but not the reverse. We test our hypothesis using a difference-in-differences event study research design that exploits cross-state variation in licensing laws to compare the unemployment rate between licensed and unlicensed workers before and after the COVID-19 recession and the Great Recession. Controlling for worker ability, we find that licensing shields workers from a recession-induced increase in the unemployment rate of 0.82 p.p. during COVID-19 and 1.11 p.p. during the Great Recession. 

This paper provides the first empirical evidence on hospital participation spillover of the National Kidney Registry (NKR), the largest kidney-exchange network in the United States. We use a unique dataset from the Scientific Registry of Transplant Recipients to define links between hospitals based on the presence of common surgeons. We find that a hospital with one more NKR connection in the last period is 1.2 to 1.5 times more likely than its no-NKR counterparts to join the NKR. The spillover concentrates among strong connections, measured by the type and the number of common surgeons. In light of the current fragmented kidney-exchange market, our finding sheds light on reducing information friction to promote new participation.