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The impact of licensing requirements on industrial organization and labor: Evidence from the U.S. private security market

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  • Meehan, Brian

Abstract

The consequences of occupational licensing regulations on the private security market are examined. Analysis suggests that these regulations impact the number of private security firms in a state, the distribution of firm size, and the average wage of private security employees. Regulations imposed in some states reduce the number of private security firms, increase the size of firms, and raise average wages in the industry. The hypothesis that some licensing requirements act as barriers to entry is examined, as are arguments that these requirements alleviate asymmetric information problems in the industry.

Suggested Citation

  • Meehan, Brian, 2015. "The impact of licensing requirements on industrial organization and labor: Evidence from the U.S. private security market," International Review of Law and Economics, Elsevier, vol. 42(C), pages 113-121.
    • Handle: RePEc:eee:irlaec:v:42:y:2015:i:c:p:113-121
    DOI: 10.1016/j.irle.2015.02.001
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Brian Meehan, 2017. "Do Economies of Scale Exist in Private Protection? Evaluating Nozick's "Invisible Hand"," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 32(Summer 20), pages 83-91.
    2. Dick M. Carpenter & Lisa Knepper & Kyle Sweetland & Jennifer McDonald, 2018. "The Continuing Burden of Occupational Licensing in the United States," Economic Affairs, Wiley Blackwell, vol. 38(3), pages 380-405, October.
    3. Thomas Snyder & Elsa Mattson & Alex Kanode, 2022. "Licensing growth and its effect on employment concentration," Economics Bulletin, AccessEcon, vol. 42(2), pages 947-958.
    4. Brian J Meehan & Edward Timmons & Andrew Meehan & Ilya Kukaev, 2019. "The effects of growth in occupational licensing on intergenerational mobility," Economics Bulletin, AccessEcon, vol. 39(2), pages 1516-1528.
    5. Brian Meehan & E. Frank Stephenson, 2020. "Reducing a Barrier to Entry: The 120/150 CPA Licensing Rule," Journal of Labor Research, Springer, vol. 41(4), pages 382-402, December.

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    More about this item

    Keywords

    Private security; Occupational licensing; Asymmetric information; Barriers to entry;
    All these keywords.

    JEL classification:

    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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