Stages of Occupational Regulation: Analysis of Case Studies

Transcription

1 Stages of Occupational Regulation: Analysis of Case Studies Morris M. Kleiner, University of Minnesota, Federal Reserve Bank of Minneapolis, and the National Bureau of Economic Research For Presentation at the European Union, Brussels, Belgium, September 30, 2013.

2

3 Influence of licensing varies based on accompanying institutions Geography Laws covering regulation Coverage v. attainment

4 Basic Definitions of Regulation in the U.S. Occupational regulation in the United States generally takes three forms: Registration, in which individuals file their names, addresses, and qualifications with a government agency before practicing their occupation. The registration process may include posting a bond or filing a fee. Certification permits any person to perform the relevant tasks, but the government or sometimes a private, nonprofit agency administers an examination and certifies those who have achieved the level of skill and knowledge for certification. Licensure: this form of regulation is often referred to as the right to practice. Under licensure laws, working in an occupation for compensation without first meeting government standards is illegal.

5 When does licensing matter?: Initial Summary of Key Results Less so at early stages More so when heavily regulated and for licensing attainment v. coverage Major effects at universal regulation Impact on worker health and safety and consumer well being?---minimal

6 Chapter 1 Introduction and Overview Basic Facts on the further evolution of Occupational regulation Licensing and certification Anatomy of Occupational Regulation Geography of Occupational Regulation Stages of occupational regulation Organization of the book 6

7 Chapter 2 An Initial Stage of Regulation: Interior Designers Chapter 3 The Rise, Fall, and Regulation of Mortgage Brokers Chapter 4 Occupational Regulation of Child Care Services 7

8 Chapter 5: Of Life, Limbs, and Licensing: Electricians and Plumbers Chapter 6: Battles Among Universally Licensed Occupations 8

9 Chapter 7: Lessons from Studies on the Stages of Occupational Regulation What are the appropriate policies and enforcement mechanisms at various stages of occupational regulation? (none to all?) What are the gains to members of the occupation from regulation to include wages, employment, and health and safety gains Are there stages of regulation where licensed workers and some consumers gain? 9

10 Evidence on Licensing Across Nations Canada UK EU China

11 Chapter One Overview of occupational regulation Trends in regulation Evolution of regulation

12 Origins of Thinking about the Issue Occupational Licensing as a topic in economics dates to the comments by Adam Smith that trades conspire to reduce the availability of skilled craftsmen in order to raise wages (Smith, 1776, reprinted 1936). 12

13 "The modern state owes and attempts to perform a duty to protect the public from those who seek for one purpose or another to obtain money. When one does so through the practice of a calling, the state may have an interest in shielding the public against the untrustworthy, the incompetent, or the irresponsible." Robert H. Jackson, U.S. Supreme Court Justice , U.S Attorney General , and American Chief of Counsel, War Trials at Nuremberg 1945, in Thomas v. Collins, 323 U.S. 516, 545 (1945).

14 The overthrow of the medieval guild system was an indispensable early step in the rise of freedom in the Western world. It was a sign of the triumph of liberal ideas, and widely recognized as such, that by the mid-nineteenth century, in Britain, the United States, and to a lesser extent on the continent of Europe, men could pursue whatever trade or occupation they wished without the by-your-leave of any governmental or quasi-governmental authority. In more recent decades, there has been a retrogression, an increasing tendency for particular occupations to be restricted to individuals licensed to practice them by the state. Milton Friedman, Nobel Laureate Economist, in Capitalism and Freedom, 1962, p. 137

15 Basic Empirical Facts on Regulation in the U.S. In 2003 the Council of State Governments estimated that more than 800 occupations were licensed in at least one state, and more than 1,100 occupations were licensed, certified, or registered in at least one state (Council on Licensure, Enforcement and Regulation [CLEAR] 2004).

16 Basic Empirical Facts on Regulation in the U.S. By 2008, approximately 29 percent of workers polled in the Westat survey and an earlier Gallup Poll said they were required to have a government-issued license to do their job, compared with about 12.4 percent who said they were union members in the Current Population Survey (CPS) for the same year (Kleiner and Krueger, 2013).

17 Figure 1 ource: Kleiner, Figure 1.1.

18 Background on the Evolution of Occupational Licensing Occupations as they develop similar tasks and common procedures for doing a job do not begin as a licensed occupations. Occupations evolve, organize, and often select licensing as a method to obtain professionalism and status, as well as to limit the supply of practitioners. Occupations tax their members through dues and engage in political activities that often lead to registration, certification, and eventually licensing. The process of regulation across political jurisdictions often takes years or decades to achieve full licensure.

19 The research and methodology examining the influence of licensing on wages has, in many ways, paralleled the research efforts of unions on wage determination (Lewis, 1986). These approaches include cross-section estimates, switchers from regulated to unregulated and vice versa over time, and cross-sectional results from within occupation comparisons. The general estimates of cross-sectional studies using Census data of state licensing s influence on wages with standard labor market controls show a range from 10 to 18 percent for higher wages associated with occupational licensing examining both coverage and attainment. 19

20 Background on the Evolution of Licensing and its various stages Consequently, new occupations are often in varying stages of the regulatory process as they seek to become regulated by units of government. Since regulation mainly influences new entrants, it would take some time before the full effect of licensing would influence wages and employment of the individuals in the occupation or the consumers of their services. Occupations at a more mature stage of regulation would be more likely to have the benefits or advantages of the various stages (higher quality and monopoly effects) of licensing than those that have recently sought or obtained regulation at different levels of government.

21 Labor Market Institutions The movement to a service-oriented economy from manufacturing, where unions and contracts were prominent, created a demand for a web of rules of the workplace that licensing may have provided in the service sector (Dunlop, 1958). While unions have declined, occupational licensing has grown over the last fifty years (Kleiner, 2006). 21

22 Stages of Regulation: Case Studies Interior designers, mortgage brokers, preschool teachers, plumbers, electricians, dental hygienists, and dentists - by the number of states requiring the practitioners to have a license---moving from less to more.

23

24 Chapter 2: Initial Stage of Regulation: Interior Designers Evolution of regulation for interior designers Only three states and the District of Columbia require licensure In just the past two years, interior design coalitions lobbied for titling or licensure in 10 states currently that have certification (including Minnesota) based on improving quality and health and safety. 24

25 An Illustration: Rationale for Licensing Interior designers may be licensed: Legislation would require degree, a test and two years of experience Monday, March 24, 2008 BY SARA WAISANEN swaisanen@kalamazoogazette.com KALAMAZOO -- A bill that would license interior designers in Michigan would bring more jobs to the state and ensure competent work, supporters say. If passed by the Legislature, the three-part bill would require interior designers to receive a degree and pass a test to become a licensed professional. Interior designers currently are not registered or licensed, so there is no way to tell if an interior designer is qualified, said Linda Thomas, president of the Coalition for Interior Design. Opponents say consumers can examine portfolios and Web sites and interview interior designers to safeguard against quality-of-work issues. 25

26 The Case of Licensing Interior Designers in Alabama on wages Year licensed

27 Policies 1) Statutes (certification and licensing) covering the occupation growing 2) Influence on the labor market is unclear 3) Impact on quality even smaller 4) At early or low stages of regulation the influence of regulation is relatively small (Law and Marks, 2005) 27

28 Chapter 3: Rise, Fall and Regulation of Mortgage Brokers: A player in the origins of the Great Recession Rationale for regulating the occupation-- where transactions are complicated and financial values high Evolution of state regulation of brokers and the industry Anatomy of statutes and administrative procedures Influence of policies on the labor market for brokers and consumers 28

29 0 2,000,000 4,000,000 6,000,000 number of loan officers/brokers employed 200, , , , , ,000 Early Trends in the Growth of Subprime Loans and Loan Officers/Brokers 1998q1 2000q1 2002q1 2004q1 2006q1 Year and Quarter subprime loans loan officer/broker 29

30 Growth of State Mortgage Broker Regulation Box and Whisker Plot of the Statutes over Time Summated Regulation Scores

31 Mortgage Broker Compensation and the Incentive Structure Raises Issues Method? Mostly commissions ($1000s per loan) Who pays? borrower (as a fee for service) lender (as a yield spread premium if the borrower agrees to a rate above the lender s minimum acceptable rate) both (frequently) Is regulation needed to balance incentives? short term: get deals done at high rates long term: get a reputation for good service

32 Regulation and Prices of Loans Does Regulation Effect the Number of High Priced Loans (where brokers may take advantage of the yield spreads)? If regulations restrict entry of providers, then the number of high priced loans may increase less competition If high priced loans are misrepresented loans, then regulation would reduce their numbers 32

33 Main Points Most forms of mortgage broker regulation--laws are not related to market outcomes. However, bonding/net worth requirements have a fairly robust association with fewer brokers fewer subprime loans higher foreclosure rates less service? more high-priced loans less competition? Results not consistent with licensing as an proconsumer entry barrier; not supportive of a human-capital theory of broker licensing 33

34 Chapter 4: Occupational Regulation of Child Care Services Licensing of Preschools Teachers Evolution and rationale for regulating preschools Structure of the market for center-based versus home-based care Wage determination Implications of regulation on children s educational attainment Anatomy of statutes and administrative procedures 34

35 Why preschool education matters Most social scientists generally agree that early childhood is among the most important developmental stages for children (Heckman and Masterov, 2006; Anderson, 2006; Grunewald and Rolnick, 2005; Shonkoff and Phillips, 2000). In the US pre-school enrollment grew from about 43% of all children age 4 in 1971 to almost 66% in 2001(Magnuson, Ruhm, and Waldfogel, 2007). 35

36 Some Benefits of Licensing PARENTS: Assurance of basic quality; Recourse for poor quality care through enforcement. PROVIDERS: Reduced competition; Increased revenue. PROFESSIONALS: Professionalize the occupation higher wages and quality 36

37 Some Costs of Licensing Barriers to entry: Child-staff ratio requirements; Maximum class size requirements; Mandated educational requirements; Curriculum requirements. Increases the costs to parents without guarantees of increased quality. 37

38 Growth in the State Regulation of Center-Based Preschools: Box and Whisker Graph Center-Based Summated Regulation Scores

39 Basic Findings for Pre-school teachers No effect on wage determination Small decline in access to schooling No effect on academic achievement of the children

40 Chapter 5: Of Life, Limbs, and Licensing: Electricians and Plumbers Evolution and rationale for regulation in construction Evidence on wage determination for Plumbers and Electricians Where Injuries and Deaths are High. This Industry has the highest number of deaths and injuries Does Occupational Regulation Matter? A New Measure of Outcomes: Worker Health and Safety 40

41 Overview of the Chapter Most of this book is devoted to the analysis of regulated white-collar occupations; however, this chapter examines electricians and plumbers, two of the most highly skilled bluecollar occupations in the construction industry

42 Overview of the Chapter The central findings show that certain occupational licensing requirements, such as minimum age, education, and exam requirements, raise the wages of electricians by about 6 to 8 percent. These results are robust for several alternative specifications for electricians. However, the results for plumbers are murky less variation in requirements.

43 Overview of the Chapter Neither the estimates for electricians nor those for plumbers show much evidence of a systematic influence of occupational licensing on the injury rates, severity of injuries, or death rates.

44 Domestic Industry Output in Construction Sector, year

45 What do electricians do and how does it relate to injuries? Some illustrations of workplace hazards: Electrocution Fire Arc flash Arc blast Static Electricity Shock 45

46 Number and Rate of Fatal Occupational Injuries by Industry, 2009 Total U.S. deaths in Iraq & Afghanistan

47 Fatal and Nonfatal Injuries in the Construction Industry, Number of deaths per 100,000 full-time worker Number of nonfatal injuries per 100,000 FTEs Ironworker 64.7 Electrical power installer 33.6 Electrical power installer 60.9 Truck driver 27.4 Roofer 32 Ironworker 25.6 Truck driver 24.4 Laborer 23.4 Laborer 21.8 Plumber 22 Electrician 10.2 Roofer 20.9 Painter 9.3 Carpenter 17.3 Plumber 7 Electrician 15.6 Carpenter 6.8 Painter 8.9 Source: CPWR Report (October 2010)

48 Median Day Missed for Workplace Injuries per Incident for 2009 (BLS, 2010) Construction Manufacturing... 9 Professional, scientific, and technical services

49 Data on Fatal and Non-fatal Injuries 49

50 Changes in the Standard Occupational Code (SOC) Systems 50

51 Implications of the Issue The case study can illuminate the potential economic and life and limb policy issues of the increased regulation of relatively dangerous occupations in the U.S. labor market. Little analysis of the general issue (Shimberg, Esser, and Kruger, 1973; Perloff, 1980), and almost no recent examination of the specific topic. 51

52 Institutional Background Labor Market Trends Characteristics of the Occupation Workplace Safety of Electricians and Plumbers 52

53 Historical and Institutional Background of Licensing in Construction Categories of construction workers: Journeyman Master Maintenance Electrician Contractor About 4 years in training if you plan to get an electrician's license through an apprenticeship program. Most students work full time and go to a school in the evening for classroom instruction. Most programs require 1 or 2 nights per week. In many cases local requirements were more stringent than state ones for both electricians and plumbers. 53

54 Variations in Licensing Regulations Licensing Licensing at the STATE or LOCAL level New York City did not license journeyman electricians Chicago has no board for licensing electrical contractors Pass rates for electricians in Chicago were lower than passing the bar exam or dental licensing exam in Illinois 54

55 Measures of Workplace Safety for Electricians and Other Construction Occupations 55

56 Frequent Events Causing Nonfatal Injuries for Electricians 56

57 Frequent Events Causing Deaths for Electricians 57

58 Trends in Injury and Death Rates for Electricians Injury Rate Death Rate Change in OHSA Regulations and innovations in the industry Note: Injury and Death Rates were computed as following: Injury rate = (Sum of the weight for the national estimate from the SOII / Estimated employment of electricians from the CPS MORG) 100; and Death rate = (Actual number of Deaths from the CFOI / Estimated number of employment of electricians from the CPS MORG) 10,

59 Severity of Injuries due to Nonfatal Injuries for Electricians and Laborers Measures of severity of injuries of a regulated and unregulated occupation in construction 25% 20% 16.6% 19.2% 18.5% Electricians Laborers 21.8% 21.1% 15% 14.1% 12.6% 12.1% 13.0% 11.7% 11.2% 11.1% 10% 6.7% 6.8% 5% 0% 1.6% 1.8% 1 day 2 days 3-5 days 6-10 days days days days >=181 days

60 Background for the Empirical Analysis Fixed Effects States Changing their Regulatory Status Local v. State Licensing 60

61 Background for the Empirical Analysis Fixed Effects States Changing their Regulatory Status Local v. State Licensing 61

62 Changes in Occupational Regulation of Electricians, Clear Movements to State Licensing 62

63 Definitions of Regulatory Variables for both Electricians and Plumbers 63

64 Change in State Licensing Regulations of Electricians Box and Whisker Graph of the sum of the Five Components of the Licensing Regulations

65 Empirical Strategy Measures of Restrictiveness over time Role of occupational regulations on Labor Market Outcomes Role of Regulation on Death and Injuries of Electricians 65

66 Testing the Earnings Model with Licensing Regulations Earnings ist is the hourly earnings of Electricians or Plumbers i at state s in time period t; R st is the licensing occupational regulations and components of the regulation in person i s state s in time period t; X ist is the vector includes covariates measuring characteristics of each person; δ and η are state and year fixed effects, respectively; and ε ist is the error term. 66

67 Role for Local Licensing Ability to control the geographic market in construction, segment the market, and limit supply Movement to State licensing may be of importance for employment opportunities relative to higher wages---issue of political economy within unions 67

68 Compensating Differentials Small Compensating Differential for higher injuries Other variables robust in the specification 68

69 Testing the Health and Safety Models with Licensing Regulations Injury Incidence Rates at the state level Severity of Injury Analysis of Injured at the individual level using days away from work due to injury/illness; Analysis is conditional on the occurrence of injury; Hazard Model Estimates of the Influence of occupational Licensing on duration of workplace injuries Death Incidence Rates at the state level 69

70 Testing the Injury Incidence Rates Model Injury Rates st is the injury incidents rates of electricians or plumbers at state s in time period t; R st is the licensing occupational regulations and components of the regulation in state s in time period t; X st is the vector includes covariates measuring characteristics of each state s ; δ and η are state and year fixed effects, respectively; and ε st is the error term. 70

71 Potential Influence of More Regulation on Reporting of Injuries Licensing requires more incidence reporting and the keeping track of any type of work related to injuries. The implementation of a licensing regime requires the reporting more technical types of injuries. 71

72 Testing the Severity of Injury Model Severity of Injury ist is the days away from work due to injury/illness of electricians or plumbers i at state s in time period t; R st is the licensing occupational regulations and components of the regulation in person i s state s in time period t; X ist is the vector includes covariates measuring characteristics of each injured/ill person; δ and η are state and year fixed effects, respectively; and ε ist is the error term. 72

73 Testing the Death Incidence Rates Model Death Rates st is the death incidence rates of Electricians (E) at state s in time period t; R st is the licensing occupational regulations and components of the regulation in state s in time period t; X st is the vector includes covariates measuring characteristics of each state s ; δ and η are state and year fixed effects, respectively; and ε st is the error term. 73

74 Do Prior Injury Rates in the Occupation Contribute to the Passage of State Licensing Laws? Potential issue of endogeneity to the extent that high levels of deaths and injuries may have influenced the passage of state or locally based occupational licensing laws Higher worker comp. insurance premiums and the passage of licensing laws Role of unions 74

75 The Key Findings We find that certain occupational licensing policies such as age/education requirements, exam requirements, and apprenticeships influence the wages of electricians. Our estimates show that certain of these state occupational licensing provisions are associated with about a 6 to 9 percent higher hourly earnings for electricians, and that having these provisions as a bundle also are positively associated with increased earnings. Local licensing of electricians in presence of unions influences wages even more. The results are robust across a number of specifications and falsification tests. 75

76 The Key Findings There are somewhat higher wages associated with higher injury rates Compensating Differentials Licensing regulations are not significant in influencing the severity of nonfatal injuries or the rates of fatal injuries. However, our results show murky results for the incidence or reporting of injuries when there is state licensing. 76

77 Conclusions The results for the incidence and severity of injury and death rates show that the impact of occupational regulation for deaths and injuries is statistically insignificant or murky in the multivariate analysis for both electricians and plumbers. The estimates presented in this chapter provide a first approximation and new data for the relationship between occupational licensing, wages, and deaths and injuries for important occupations in the construction industry.

78 Conclusions Although regulation may have an influence through the monopoly effect on wage determination for electricians, licensing does not appear to be influential in reducing either life-threatening injuries or the risk of injuring limbs two hazards that workers in these two essential occupations face in the construction industry.

79 Chapter 6: Battles Among Universally Licensed Occupations Analyzing Government Regulations on Labor Market Outcomes for Dentists and Hygienists

80 Ensuring Quality or Restricting Competition in Dentistry?: An Example Tennessee recently became the most current of a handful of states to crack down on the teeth-whitening business. Teeth-whitening franchises have run afoul of several state dental boards and, in January, the Tennessee Board of Dentistry declared that the kioskwhiteners are practicing dentistry without a license.

81 U.S. Federal Trade Commission charges North Carolina Board of Dental Examiners The Federal Trade Commission (FTC) has charged that dentists in North Carolina, "acting through the instrument of the North Carolina Board of Dental Examiners ("Dental Board"), are colluding to exclude non-dentists from competing with dentists in the provision of teeth whitening services.

82 This chapter Stated Goals of Dental Hygienists (ADHA) From ADHA website Achieve self-regulation by independent boards in all states for all 120,000 licensed hygienists in the U.S. Remove restrictive supervision laws that prevent dental hygienists from providing oral health care services without a dentist present.

83 Stated Goals and Outcomes of Dental Hygienists (ADHA) From ADHA website Self-regulation would eliminate the conflict of interest that exists when interests of hygienists differ from those of dentists. Employer dentists regulate their own employees and would allow for greater emphasis on providing a delivery system that affords expanded access to dental hygiene services and oral health care.

84 Comment on California Law allowing Hygienists to Open Independent Clinics Whether or not a dental hygiene clinic can be a successful business model is none of a dentist s business. The free market system will determine that, not a dentist. Most dentists are notoriously very poor business men/women.

85 Policy Issues Among Universally Licensed Occupations In those cases where universally licensed occupations are both complements and substitutes for one another in providing a service, the state government determine who can do the work and supervise the tasks that are required for the patient.

86 Dentists Control of Licensing Boards Generally, dentists dominate the state licensing boards; other licensed professionals such as hygienists have a minority role in the process. Typically, state licensing boards either have no hygienists or, more likely, have dentists that dominate the boards. The board makes recommendations to the legislature on regulations governing which occupation provides dental services, and provides legal services to defend regulatory practices in state courts.

87 Findings Historical conflicts among dentists and hygienists over who does the work. Theory suggests that regulation raises wages and reduces employment for dental services and that there are elements of monopsony in the market for hygienists.

88 Findings Our estimates show that the ability to have independent practices for hygienists is associated with approximately 11 percent higher hourly earnings, and this is also associated with about a 22 percent reduction in dentists hourly earnings. Various sensitivity and falsification tests show these estimates to be robust. For employment, the ability of hygienists to have independent practices is associated with about a 6 percent higher state employment growth rate for hygienists and approximately a 26 percent lower state employment growth rate for dentists.

89 Findings Overall results are consistent with the theory that state laws on permissible tasks and market structure matter in wage and employment determination for both dentists and hygienists. Also, there are suggestions for the implications of these results for costs and access to dental services.

90 Focus of the Institutional Analysis We present the evolution and anatomy of state licensing of dentists and hygienists and show how state policies have changed to favor greater autonomy for hygienists (Adams, 2004).

91 Recent Growth of Duties and Autonomy of Hygienists from Dentists Dental Hygiene Professional Practice Index (DHPPI) over

92 Panel B: Number of tasks permitted over

93 Incentive for Dentists to provide more services

94 Conclusions The licensing of occupations is most pervasive among health care occupations with 76 % of nonphysicians saying they must be licensed. Dentists were licensed well before dental hygienists and are a larger and better financed occupation to potentially influence public policy. A model of dental production that has elements of occupational licensing favors dentists in the production of services to patients.

95 Conclusions (2) The model predicts that regulations requiring dentists to supervise hygienists result in higher earnings for dentists and lower earnings and employment for dental hygienists. We then extend the model to show that it has elements of monopsony, which can result in potential deadweight losses to society if these monopsony rents are pervasive.

96 Conclusions (3) During the 2000 to 2007 period, hygienists were allowed to do more tasks and in seven states were allowed to operate independently. The time and state fixed effects models for both dentists and hygienists showed that greater autonomy by legally allowing hygienists to work independently of dentists is associated with approximately 11 percent higher earnings and a 6 percent increase in the employment growth of dental hygienists.

97 Conclusions (4) State policy provisions favoring hygienists are associated with approximately a 17 percent reduction in dentists hourly earnings and a 26 percent reduction in dental employment growth in the states. Using a simple deadweight loss analysis consistent with a monopsony model, the typical state would lose approximately 1 percent of total dental expenditures per year due to licensing and by not allowing hygienists to practice on their own.

98 Conclusions (5) The results suggest that state laws on permissible tasks matter in wage and employment determination for both dentists and hygienists. The state legislature and the courts decide on the rules for occupational licensing. These rulings are the arbiter of who gets to do the work.

99 Chapter 7 Lessons from Studies on the Stages of Occupational Regulation The essential task of democratic society is to establish a proper balance between freedom and order. A danger in modern democracy is the threat of overthrowing the equilibrium either by excessive emphasis on governmental regulation on the one hand or by the irresponsibility and inequalities of completely unregulated freedom on the other hand.

100 The purpose of the book has been to examine several occupations that are at different stages of government regulation and determine to what extent licensing has influenced the individuals in the occupation, consumers, or other closely related occupational practitioners.

101 Occupation level of occupational regulation labor market effects Interior Designers Low None to Modest wage and employment effects Mortgage Brokers Low to moderate Modest wage and employment effects Pre-school instructors and related assistants Electricians and Plumbers Dentists and Dental Hygienists moderate Modest to no wage effects Other State efforts to become universally licensed Recent moves to gain universal licensing, more regulation has murky effects on consumers Movement to universal licensing, little evidence of major influences on academic performance High Moderate wage effects Movement to make regulations more stringent, little evidence of any influence on worker safety Universal Moderate to high wage effects Relaxed regulations result in gains for Hygienists at the expense of Dentists

102 Table 7.2 Regression Estimates for Wage Determination among British Workers in Licensed Occupations, by Characteristics of Licensing Regime in Britain Occupations with Universal Licensing Ln(wage/hour) Year became licensed (reference group are those occupations that were licensed between ) Before *** [4.88] *** [5.24] *** [2.64] [0.83] R-squared 0.41 Observations 10,466 SOURCE: Bryson et al. (2012). NOTE: t statistics in brackets. * significant at the 0.10 level; ** significant at the 0.05 level; *** significant at the 0.01 level. The model includes standard human capital and other entry requirements

103 Licensing Across Nations Canada UK EU China

104 Licensing Across Nations Wage effects in the U.K. and Canada somewhat similar to the U.S. EU has developed measures of regulation but no clear evidence on coverage or on national wage determination China similar to the U.S., Canada, and U.K.

105 Small regulatory differences that matter? Individuals in Licensed Occupations gain more the longer the occupation is highly regulated Attainment of a license matters rather than being in an occupation that has some regulation or is covered by a licensing law (dentists v. engineers)

106 Conclusions Since licensing influences many more individuals in the United States and in some other nations than unions or the minimum wage, its evaluation should be important for social science researchers, policymakers, and citizens

107 Conclusions It helps determine the structure of markets where service market monopolies are provided by government. As the politics of occupational licensing ebbs and flows with economic and political trends, it is important to shine the light of data and analysis to determine both the equity and efficiency aspects through the various stages of the evolution of occupational licensing.