CSOR Hosts Inaugural Occupational Licensing Conference: Emerging Scholars

CSOR Presents at FBLA
April 30, 2019

CSOR Hosts Inaugural Occupational Licensing Conference: Emerging Scholars

The Knee Center for the Study Occupational Regulation welcomed thirteen scholars from across the world to discuss and debate the many aspects of occupational regulation from April 26-28, 2019.

CSOR’s first in-house conference served as a great opportunity for the scholars to put their minds together to provide, and receive, feedback for expansion on their current research.

Kalonji Johnson, Acting Commissioner of the Bureau of Professional and Occupational Affairs, was the guest speaker during Saturday’s luncheon. “CSOR has become a household name in the Capitol when discussing occupational licensing. There are some incredible people involved in that work, I’m hoping the Commonwealth can continue to reach out and tap into this network you guys have built. I definitely want to come back and spend more time on campus!”

Below are summaries of the presentations. Please feel free contact us for more information on the papers, presentations and conference.

Jie Chen (Lehigh University) PhD Candidate
The Effects of Dental Hygienist Scope of Practice and Autonomy on Dental Care Utilization

Because of the limited supply of health care providers relative to the demand for health care services, increases in provider autonomy are believed to improve access to health care. However, research on the impact of scope of practice laws for health and dental care providers is limited. The author investigates the effects of dental hygienist scope of practice regulations and autonomy levels on dental care access, utilization, and expenditure. The paper measures the strength of these laws by extending the Dental Hygiene Professional Practice Index to the years 2001 to 2014. Data on dental care utilization for our analysis come from the 2001-2014 Medical Expenditure Panel Survey. For research, the author uses a difference-indifference approach that exploits variation within states over time in scope of practice laws for identification. Evidence indicates that increasing the autonomy level of dental hygienists modestly improves dental care utilization, but increases in utilization are more pronounced in areas with a shortage of dental care providers.

Wing “Bobby” Ying Chung (Clemson University) PhD Candidate
Employment Effect of Occupational Licensing: Differential Impact on Women

This paper empirically examines the effect of occupational licensing on employment using policy discontinuity at the state borders in the US. By combining various datasets on state licensing requirements of around 300 professions. The findings indicate that licensing completely removes the negative gender effect in physically-demanding or less error-tolerant professions. It also partly offsets the negative gender effect in decision-intensive professions. The effect mainly comes from licensing requiring examination, training or continuous education. The finding of this paper suggests that licensing serves as a signal to inform the employers about a worker’s productivity. The information content is more valuable for women workers in the three types of professions.

Dr. Darwyyn Deyo (San Jose State University)
Crossing State Borders: The Interstate Medical Licensure Compact and Hospital Quality

Board-licensed health practitioners often face significant barriers to mobility across state borders, reducing both occupational and residential mobility. These requirements may also impact the health care quality and access which patients face in their state, especially those patients who live in areas with low access to care, as the mix of physicians they face changes. The Interstate Medical Licensure Compact (IMLC) was launched to increase access to health care for patients, but it also impacts the ability of physicians to practice across state lines. As more physicians can practice in more states, patients may face changes in the quality of their care. The author considers the effect of the IMLC on the quality of care which patients receive in states which are part of the IMLC compared with those which are not. In order to measure quality, the author uses Hospital Compare data on Healthcare Associated Infections at the hospital level, focusing on data from 2012 to 2017, with the treatment year in 2015. After linking the file of state and year indicators with the IMLC dataset and testing the effect of interstate licensing on quality, the preliminary results indicate that hospitals which are located in states which are part of the IMLC have significantly lower infection levels than hospitals located in states which are not part of the IMLC.

Samuel Ingram (University of Kentucky) PhD Candidate
The Labor Market Dynamics of Real Estate Agents and Barriers to Entry

This paper examines the labor market entry of real estate agents in the United States. Data from the 2012 to 2017 American Community Survey are linked to local housing price fluctuations from the Federal Housing Finance Agency for 100 large metro areas. The cost of entry associated with occupational licensing for new real estate agents is carefully measured for each market and interacted with housing fluctuations to investigate the role for barriers to entry. A 10% increase in housing prices is associated with a 4% increase in the number of agents. However, increased license stringency reduces the labor market response by 30%. The impact of licensing is stronger for women and workers younger than 50.

Ilya Kukaev (Warsaw School of Economics) PhD Candidate
Occupational Regulation in Russia

Recent studies of occupational regulation and its effects have focused on only a few countries, generally market economies such as the U.S. and EU. Except for Poland and China, no studies have been done for transition economies. Based on an analysis of Russian legislation, individuals can identify the two levels of regulation, certification and licensing. The former is done through educational certificates and the latter through laws that set mandatory requirements to enter an occupation. The paper also describes a unique institution, self-regulatory organizations, that is aimed to shift the burden of regulation from government to industry level. Licensed occupations are identified, licensing requirements are summarized and avenues for further research are delineated.

Dr. Brian Meehan (Berry College)
Accounting for the Impact of the 120/150 CPA Licensing Rule

Education requirements for Certified Public Accountants (CPAs) have tended to increase over the past few decades. Recently there has been a push in the other direction. Many states with 150 credit hour licensing requirements have changed the requirement so that candidates with 120 credit hours can sit for the CPA exam. While other states have moved from a 120 credit hour requirement for both CPA licensing and sitting form the exam, to a rule that allows candidates to sit for the exam with 120 credit hours but increases the licensing requirement to 150 hours. We examine the impact of these changes on CPA pass rates and the number of candidates sitting for the CPA exam. The results indicate that the reduction in hours required to sit for the exam increases the pool of candidates sitting for the exam, but has no impact on pass rates. The results also suggest that states with increased education requirements experience reductions in the number of candidates sitting for the exam, but no impact on pass rates. Thus, the additional 30 hours of education does not appear to prepare candidates more for the exam, but instead just decreases the pool of candidates.

Alicia Plemmons (Georgia State University) PhD Candidate
Occupational Licensing Effects on Firm Entry and Employment

Occupational licensing is a government permission to work within a specific job classification. The costs to firms of paying to license employees can be a substantial consideration for businesses who are making entry and employment decisions. After exploiting variations in state-level occupational licensing education and experience requirements of firms located near state borders, the findings indicate that firms are less likely to enter the market in more expensive states when there are cheaper alternatives within short distances. These effects on firm entry are much larger in labor-intensive industries. Evidence suggests that average firm employment is lower in high occupational licensing cost states for heavily regulated industries, even after accounting for state and industry attributes.

Noah Trudeau (West Virginia University) PhD Candidate
Occupational Licensing and Intra-MSA Effects: New York City Massage Therapists

This paper looks at how state-level occupational licensing laws can have effects on major MSAs that cross state borders. Looking specifically at the New York-Newark-Jersey City MSA, data from the American Community Survey reveals how the differing licensing schemes affect the incomes of practicing massage therapists. Ultimately, it appears that the effect of easily available substitutes of massage therapists in the border state mutes the effect of the wage premium that would be caused by a more restrictive licensure scheme. This suggests that competition either increases wages of the less restricted state, decreases the wages of the more restricted state, or a combination of the two. In any case, this leaves an opportunity for entrepreneurship on the point on the practitioner to be licensed in the less restrictive state to have higher return on cost of licensure.

Dr. Xing Xia (Yale-NUS College in Singapore)
Information Makes a Difference: The Effects of Occupational Licensing on Dental Assistants

This paper documents the evolution of licensing and scope of practice regulations for dental assistants (DAs) – an occupation that is until the 1940s largely unregulated. The author studies the effects of licensing for different levels of job tasks on DAs’ labor market outcomes. Entry-level license, which is required by 6 states and D.C., provides little information of a DA’s competency, has small and statistically insignificant effects on average DA wages and employment but significantly widens the wage gap between minorities and non-minorities. A scope-of-practice expansion that allows DAs to take X-rays significantly increases both average wages and employment of DAs. Although all states by now have allowed DAs to take X-rays, 20 states require an additional X-ray permit, a license specifically for the X-rays procedure that carries information about a DA’s competence for taking X-rays. The X-ray permit significantly reduces the wage gap between minorities and non-minorities. These results underscore the importance of examining scope of practice changes alongside occupational licensing requirements and suggest that the effects of licensing depends on the information value of the license. Licensing may help minority workers if the license carries information that would otherwise be costly for employers to obtain.

Dr. Tingting Zhang (Western New England University)
Does Occupational Licensing Increase Wage Inequality

 The purpose of the paper is to examine the impact of occupational regulation, a labour market institution that grants a group of individuals the exclusive right to practice a particular occupation, on heterogeneity in employment earnings over time. The empirical analysis draws on the Canadian Labour Force Survey (LFS) during the period 1998 to 2014. The author uses the recentered influence function (RIF) of the unconditional quantile regression to estimate the extent to which licensed occupations have a uniform impact across the wage distribution, using union wage premiums as a reference. The unconditional quantile estimates indicate that the impact of occupational licensing is different at different points along the wage distribution. The estimates suggest that between-group inequality-enhancing effects dominate across the majority of the wage distribution and are particularly strong at the high end—the higher the wage, the more licensing premiums those wage earners enjoy. This study shows that occupational licensing contributes to increasing income inequality, changes in government regulations and labour market conditions, and organizational practices. The empirical findings also point to the rent-capturing behaviours of occupational licensing. As occupational licensing becomes a more prominent labour market institution, studies focusing on its economic impacts could improve the effectiveness of evidence-based public policy decision-making.

 

Additional conference attendees include:
Dr. Peter Blair (Harvard Graduate School of Education)

Peter Blair is a faculty research Fellow of the National Bureau of Economic Research and an assistant professor of education at the Harvard Graduate School of Education. He serves as principal investigator of the Blair Economics Lab (BE-Lab), an economic research group based at Clemson University. His group’s research in applied micro-economic theory focuses on: supply-side issues in higher education, the effects of occupational licensing on labor market discrimination, and the link between residential segregation and educational outcomes.

Blair received his Ph.D. in applied economics from the Wharton School, his M.A. in theoretical physics from Harvard University, and his B.Sc. in physics and mathematics from Duke University. He is from the beautiful islands of the Bahamas.

David Deerson (Attorney, Pacific Legal Foundation)

David Deerson is an attorney focusing on property rights and economic liberty at the Pacific Legal Foundation (PLF), a nonprofit legal organization that defends individual rights against government overreach and abuse. He is a member of the California Bar and holds a J.D. from Vanderbilt University.

Stephen Slivinksi (Arizona State University)

Stephen Slivinski is a senior research fellow and director of the Doing Business North America (DBNA) project at the Center for the Study of Economic Liberty at Arizona State University. He formerly held the position of senior economist at the Goldwater Institute, research fellow at the Mercatus Center at George Mason University and senior editor in the research department of the Federal Reserve Bank of Richmond. Prior to that he was director of budget studies at the Cato Institute and senior economist at the Tax Foundation.

His research focuses on the regulatory barriers to entry for businesses and entrepreneurs, particularly as it manifests itself in state-level occupational licensing burdens. He has published research on the influence these licensing burdens have on the rate of immigrant entrepreneurs as well as a first-of-its-kind analysis of the adverse effects these barriers have on the ability of those leaving prison to integrate into the labor force.

His writing has appeared in the Wall Street Journal, the New York Post, Businessweek, the Arizona Republic, and many other print and on-line publications. He has appeared on CNN, Bloomberg, Fox News Channel, and MSNBC. He holds a master’s degree in economics from George Mason University.

Interested in learning more about occupational regulation? Interested in attending CSOR’s future conferences? Please contact Vice President of Government Relations and Public Affairs Alanna Wilson at awilson@francis.edu.