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Occupational Licensing of a Credence Good: The Regulation of Midwifery

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Author Info
A. Frank Adams III (Department of Economics, Kennesaw State University)
Robert B. Ekelund Jr. () (Auburn University and Trinity University (San Antonio))
John D. Jackson (Auburn University)

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Abstract

A general theoretical and empirical model of the impact of regulation on supply and demand (prices and quantities) is developed in this paper. The regulation of midwifery services—of certified nurse-midwives (CNMs)—relative to obstetricians (OBs) is analyzed within this framework. Demand-side (quality assurance) effects are distinguished from supply-side (Stigler-Peltzman) effects in the model. Since both unambiguously predict a price increase, we focus on the regulatory impact on quantity. We find, within the empirical model, that while both effects are present, supply-restricting effects dominate quality assurance in the U.S. market for CNM services. When mean regulations are compared to minimum regulations in the sample, CNM births increase from just under 6% of all births to a little over 11%. On net, regulation reduces the quantity of CNM births.

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Publisher Info
Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 69 (2003)
Issue (Month): 3 (January)
Pages: 659-675
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Handle: RePEc:sej:ancoec:v:69:3:y:2003:p:659-675

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  1. E. Frank Stephenson & Erin E. Wendt, 2009. "Occupational Licensing: Scant Treatment in Labor Texts," Econ Journal Watch, Atlas Economic Research Foundation, vol. 6(2), pages 181-194, May. [Downloadable!]
  2. Shirley Svorny, 2004. "Licensing Doctors: Do Economists Agree?," Econ Journal Watch, Atlas Economic Research Foundation, vol. 1(2), pages 279-305, August. [Downloadable!]
  3. Michael Dueker & Ada Jacox & David Kalist & Stephen Spurr, 2005. "The Practice Boundaries of Advanced Practice Nurses: An Economic and Legal Analysis," Journal of Regulatory Economics, Springer, vol. 27(3), pages 309-330, 01. [Downloadable!] (restricted)
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