of labor in an occupation or other labor market position drive up wages in these positions and
thereby contribute to wage inequality. In this article, we develop a theoretical argument to
account for differences in the prevalence and wage effects of occupational closure across
countries and assess its predictions in the United Kingdom (UK), a liberal market economy
(LME), and Germany, a coordinated market economy (CME). Using newly collected
occupation-level data on licensure, educational credentialing, unionization, and
apprenticeships, we show that closure increases mean occupation wages in both countries,
with vocational credentialing and unionization having particularly strong effects in Germany
and tertiary credentialing and licensure having particularly strong effects in the UK. Although
much of the comparative inequality literature focuses on the inequality-reducing labor market
institutions in CMEs and the dearth of such institutions in LMEs, we show that labor markets
in examples of both systems are entirely polluted by rents that contribute to wage inequality.
