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

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  • Morris M. Kleiner
  • Kyoung Won Park

Abstract

Occupational licensing is among the fastest-growing labor market institutions in the U.S. economy. One of the key features of occupational licensing is that the law determines who gets to do the work. In those cases where universally licensed occupations are both complements to and substitutes for one another in providing a service, the government determines who can do the tasks that are required for the consumer. In this study, we examine dentists and dental hygienists, who are both universally licensed and provide complementary services to patients, but may also be substitutes as service providers. We focus on the labor market implications of governmental requirements on permissible tasks and the supervision of hygienists’ activities by dentists. Since there are elements of monopsony in the market we examine, we use the model as a guide for our analysis. We find that states that allow hygienists to be self-employed have about 10 percent higher earnings, and that dentists in those states have lower earnings and slower employment growth. Several sensitivity and falsification tests using other regulated and partially regulated occupations show that our licensing measures are generally robust to alternative specifications. Our estimates are consistent with the view that winning the policy and legal battle in the legislature and courts on the independence of work rules matters in the labor market for these occupations.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16560.

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Date of creation: Nov 2010
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Handle: RePEc:nbr:nberwo:16560

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  1. Pedro Carneiro & James Heckman & Edward Vytlacil, 2009. "Evaluating marginal policy changes and the average effect of treatment for individuals at the margin," CeMMAP working papers CWP21/09, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  2. Erica L. Groshen, 1988. "Why do wages vary among employers?," Economic Review, Federal Reserve Bank of Cleveland, issue Q I, pages 19-38.
  3. William M. Boal & Michael R. Ransom, 1997. "Monopsony in the Labor Market," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 86-112, March.
  4. Tanya Wanchek, 2009. "Dental Hygiene Regulation and Access to Care," Working Papers 2009-02, Center for Economic and Policy Studies, revised 23 Jul 2009.
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Cited by:
  1. Kevin M. Stange, 2013. "How Does Provider Supply and Regulation Influence Health Care Market? Evidence from Nurse Practitioners and Physician Assistants," NBER Working Papers 19172, National Bureau of Economic Research, Inc.
  2. Manning, Alan, 2011. "Imperfect Competition in the Labor Market," Handbook of Labor Economics, Elsevier.
  3. Terance J. Rephann & Tanya Wanchek, 2012. "Filling the Gaps: Dentist Disparities along the Rural Urban Continuum," Working Papers 2012-02, Center for Economic and Policy Studies.
  4. Alan Manning, 2010. "Imperfect competition in the labour market," LSE Research Online Documents on Economics 28729, London School of Economics and Political Science, LSE Library.

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