IDEAS home Printed from https://ideas.repec.org/a/eee/labeco/v25y2013icp141-152.html
   My bibliography  Save this article

The impact of potential labor supply on licensing exam difficulty

Author

Listed:
  • Pagliero, Mario

Abstract

Entry into licensed professions requires meeting competency requirements, typically assessed through licensing examinations. This paper explores whether the number of individuals attempting to enter a profession (potential supply) affects the difficulty of the entry examination. The empirical results suggest that a larger potential supply may lead to more difficult licensing exams and lower pass rates. This implies that licensing may partially shelter the market from supply shocks and limit the impact of policies targeted at increasing labor supply.

Suggested Citation

  • Pagliero, Mario, 2013. "The impact of potential labor supply on licensing exam difficulty," Labour Economics, Elsevier, vol. 25(C), pages 141-152.
    • Handle: RePEc:eee:labeco:v:25:y:2013:i:c:p:141-152
    DOI: 10.1016/j.labeco.2013.04.007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0927537113000493
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.labeco.2013.04.007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Morris M. Kleiner & Alan B. Krueger, 2010. "The Prevalence and Effects of Occupational Licensing," British Journal of Industrial Relations, London School of Economics, vol. 48(4), pages 676-687, December.
    2. Adriana Kugler & Robert Sauer, 2002. "Doctors without borders: The returns to an occupational license for Soviet immigrant physicians in Israel," Economics Working Papers 648, Department of Economics and Business, Universitat Pompeu Fabra.
    3. Leland, Hayne E, 1979. "Quacks, Lemons, and Licensing: A Theory of Minimum Quality Standards," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1328-1346, December.
    4. Avner Shared & John Sutton, 1981. "The Self-Regulating Profession," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 48(2), pages 217-234.
    5. Pashigian, B Peter, 1977. "The Market for Lawyers: The Determinants of the Demand for and Supply of Lawyers," Journal of Law and Economics, University of Chicago Press, vol. 20(1), pages 53-85, April.
    6. Morris M. Kleiner, 2006. "Licensing Occupations: Ensuring Quality or Restricting Competition?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number lo, November.
    7. Catherine Schaumans & Frank Verboven, 2008. "Entry and regulation: evidence from health care professions," RAND Journal of Economics, RAND Corporation, vol. 39(4), pages 949-972, December.
    8. Morris M. Kleiner & Alan B. Krueger, 2013. "Analyzing the Extent and Influence of Occupational Licensing on the Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 31(S1), pages 173-202.
    9. Kleiner, Morris M & Kudrle, Robert T, 2000. "Does Regulation Affect Economic Outcomes? The Case of Dentistry," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 547-582, October.
    10. Smith, Adam, 1776. "An Inquiry into the Nature and Causes of the Wealth of Nations," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1776.
    11. Law, Marc T. & Kim, Sukkoo, 2005. "Specialization and Regulation: The Rise of Professionals and the Emergence of Occupational Licensing Regulation," The Journal of Economic History, Cambridge University Press, vol. 65(3), pages 723-756, September.
    12. Maurizi, Alex, 1974. "Occupational Licensing and the Public Interest," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 399-413, Part I, M.
    13. Simon Rottenberg, 1980. "Occupational Licensure and Regulation," Books, American Enterprise Institute, number 968900, September.
    14. Marc T. Law & Mindy S. Marks, 2009. "Effects of Occupational Licensing Laws on Minorities: Evidence from the Progressive Era," Journal of Law and Economics, University of Chicago Press, vol. 52(2), pages 351-366, May.
    15. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    16. Harrington, David E & Krynski, Kathy J, 2002. "The Effect of State Funeral Regulations on Cremations Rates: Testing for Demand Inducement in Funeral Markets," Journal of Law and Economics, University of Chicago Press, vol. 45(1), pages 199-225, April.
    17. Pashigian, B Peter, 1979. "Occupational Licensing and the Interstate Mobility of Professionals," Journal of Law and Economics, University of Chicago Press, vol. 22(1), pages 1-25, April.
    18. Andrews,Donald W. K. & Stock,James H. (ed.), 2005. "Identification and Inference for Econometric Models," Cambridge Books, Cambridge University Press, number 9780521844413.
    19. Mario Pagliero, 2010. "Licensing Exam Difficulty and Entry Salaries in the US Market for Lawyers," British Journal of Industrial Relations, London School of Economics, vol. 48(4), pages 726-739, December.
    20. Pagliero, Mario, 2011. "What is the objective of professional licensing? Evidence from the US market for lawyers," International Journal of Industrial Organization, Elsevier, vol. 29(4), pages 473-483, July.
    21. Haas-Wilson, Deborah, 1986. "The Effect of Commercial Practice Restrictions: The Case of Optometry," Journal of Law and Economics, University of Chicago Press, vol. 29(1), pages 165-186, April.
    22. Carl Shapiro, 1986. "Investment, Moral Hazard, and Occupational Licensing," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(5), pages 843-862.
    23. Shepard, Lawrence, 1978. "Licensing Restrictions and the Cost of Dental Care," Journal of Law and Economics, University of Chicago Press, vol. 21(1), pages 187-201, April.
    24. David E. Harrington, 2007. "Markets: Preserving Funeral Markets with Ready-to-Embalm Laws," Journal of Economic Perspectives, American Economic Association, vol. 21(4), pages 201-216, Fall.
    25. Edward Timmons & Robert Thornton, 2008. "The Effects of Licensing on the Wages of Radiologic Technologists," Journal of Labor Research, Springer, vol. 29(4), pages 333-346, December.
    26. Milton Friedman & Simon Kuznets, 1945. "Income from Independent Professional Practice," NBER Books, National Bureau of Economic Research, Inc, number frie54-1, March.
    27. Morris M. Kleiner, 2000. "Occupational Licensing," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 189-202, Fall.
    28. Leffler, Keith B, 1978. "Physician Licensure: Competition and Monopoly in American Medicine," Journal of Law and Economics, University of Chicago Press, vol. 21(1), pages 165-186, April.
    29. Maya N. Federman & David E. Harrington & Kathy J. Krynski, 2006. "The Impact of State Licensing Regulations on Low-Skilled Immigrants: The Case of Vietnamese Manicurists," American Economic Review, American Economic Association, vol. 96(2), pages 237-241, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Piotr Bialowolski & Dorota Weziak-Bialowolska, 2021. "What Does It Take to Be a Good Lawyer? The Underpinnings of Success in a Rapidly Growing Legal Market," Sustainability, MDPI, vol. 13(11), pages 1-15, May.
    2. Mario Pagliero, 2019. "Occupational Licensing in the EU: Protecting Consumers or Limiting Competition?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 55(1), pages 137-153, August.
    3. Mario Pagliero & Edward Timmons, 2013. "Occupational Regulation in the European Legal Market," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 10(2), pages 243-265, August.
    4. Cascino, Stefano & Tamayo, Ane & Vetter, Felix, 2020. "Labor market effects of spatial licensing requirements: evidence from CPA mobility," LSE Research Online Documents on Economics 107054, London School of Economics and Political Science, LSE Library.
    5. Ilya Kukaev & Edward J. Timmons, 2023. "Certifiably employable?: The effects of occupational regulation on unemployment duration," Working Papers 23-02, Department of Economics, West Virginia University.
    6. Maria Koumenta & Mario Pagliero, 2017. "Occupational Licensing in the European Union: Coverage and Wage Effects," Carlo Alberto Notebooks 525, Collegio Carlo Alberto.
    7. Pagliero, Mario, 2018. "Occupational Licensing, Labor Mobility, and the Unfairness of Entry Standards," CEPR Discussion Papers 13076, C.E.P.R. Discussion Papers.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mario Pagliero, 2007. "The Impact of Potential Labor Supply on Licensing Exam Difficulty in the US Market for Lawyers," CHILD Working Papers wp19_08, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
    2. Pagliero, Mario, 2011. "What is the objective of professional licensing? Evidence from the US market for lawyers," International Journal of Industrial Organization, Elsevier, vol. 29(4), pages 473-483, July.
    3. Mario Pagliero, 2019. "Occupational Licensing in the EU: Protecting Consumers or Limiting Competition?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 55(1), pages 137-153, August.
    4. Mario Pagliero & Edward Timmons, 2013. "Occupational Regulation in the European Legal Market," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 10(2), pages 243-265, August.
    5. Alicia Plemmons, 2022. "Occupational licensing's effects on firm location and employment in the United States," British Journal of Industrial Relations, London School of Economics, vol. 60(4), pages 735-760, December.
    6. Xia, Xing, 2021. "Barrier to Entry or Signal of Quality? The Effects of Occupational Licensing on Minority Dental Assistants," Labour Economics, Elsevier, vol. 71(C).
    7. Marek Zapletal, 2017. "The Effects of Occupational Licensing Evidence from Detailed Business-Level Data," Working Papers 17-20, Center for Economic Studies, U.S. Census Bureau.
    8. Koumenta, Maria & Pagliero, Mario & Rostam-Afschar, Davud, 2022. "Occupational Regulation, Institutions, and Migrants’ Labor Market Outcomes," Labour Economics, Elsevier, vol. 79(C).
    9. Marc T. Law & Mindy S. Marks, 2017. "The Labor-Market Effects of Occupational Licensing Laws in Nursing," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(4), pages 640-661, October.
    10. Chiara Farronato & Andrey Fradkin & Bradley Larsen & Erik Brynjolfsson, 2020. "Consumer Protection in an Online World: An Analysis of Occupational Licensing," NBER Working Papers 26601, National Bureau of Economic Research, Inc.
    11. Wei Chi & Morris M. Kleiner & Xiaoye Qian, 2017. "Do Occupational Regulations Increase Earnings? Evidence from China," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(2), pages 351-381, April.
    12. J. Mark Ramseyer & Eric Rasmusen, 2013. "Lowering the Bar to Raise the Bar: Licensing Difficulty and Attorney Quality in Japan," Working Papers 2013-12, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    13. Edward J Timmons & Anna Mills, 2018. "Bringing the Effects of Occupational Licensing into Focus: Optician Licensing in the United States," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 44(1), pages 69-83, January.
    14. Giuseppe Rose & Francesco Mazzulla, 2023. "Relaxing Occupational Licensing In Italy: A Staggered Difference In Differences Analysis Using Balance-Sheet Data Of Italian Pharmacies," Working Papers 202302, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
    15. Pagliero, Mario, 2018. "Occupational Licensing, Labor Mobility, and the Unfairness of Entry Standards," CEPR Discussion Papers 13076, C.E.P.R. Discussion Papers.
    16. Morikawa, Masayuki, 2018. "Occupational licenses and labor market outcomes in Japan," Japan and the World Economy, Elsevier, vol. 48(C), pages 45-56.
    17. Sauro Mocetti & Giacomo Roma & Enrico Rubolino, 2022. "Knocking on Parents’ Doors: Regulation and Intergenerational Mobility," Journal of Human Resources, University of Wisconsin Press, vol. 57(2), pages 525-554.
    18. John M. Barrios, 2022. "Occupational Licensing and Accountant Quality: Evidence from the 150‐Hour Rule," Journal of Accounting Research, Wiley Blackwell, vol. 60(1), pages 3-43, March.
    19. Bruno Deffains & Dominique Demougin, 2023. "Capitation taxes and the regulation of professional services," European Journal of Law and Economics, Springer, vol. 55(2), pages 167-193, April.
    20. Mocetti, Sauro & Rizzica, Lucia & Roma, Giacomo, 2021. "Regulated occupations in Italy: Extent and labour market effects," International Review of Law and Economics, Elsevier, vol. 66(C).

    More about this item

    Keywords

    Occupational licensing; Minimum standards; Entry regulation; Legal market;
    All these keywords.

    JEL classification:

    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • K2 - Law and Economics - - Regulation and Business Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:labeco:v:25:y:2013:i:c:p:141-152. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/labeco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.