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The Demand for Healthcare Regulation: The Effect of Political Spending on Occupational Licensing Laws

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  • Benjamin J. McMichael

Abstract

Using data on political spending in state elections, this study considers the role of political contributions by healthcare professional interest groups in states' decisions to enact occupational licensing laws. These laws govern how different professions may operate in healthcare markets, and while they ostensibly exist to protect consumers, licensing laws can also insulate professionals from competition in healthcare markets. Higher political spending by physician interest groups increases the probability that a state maintains licensing laws restricting the practices of nurse practitioners (NPs) and physician assistants (PAs). Conversely, increased spending by hospital interest groups increases the probability that a state allows NPs and PAs to practice with more autonomy. Nurse groups, which include groups affiliated with NPs, have a smaller effect on licensing laws. And nonphysician groups, which include groups affiliated with PAs, have almost no effect on licensing laws. These results are consistent with the investment theory of political spending.

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  • Benjamin J. McMichael, 2017. "The Demand for Healthcare Regulation: The Effect of Political Spending on Occupational Licensing Laws," Southern Economic Journal, John Wiley & Sons, vol. 84(1), pages 297-316, July.
    • Handle: RePEc:wly:soecon:v:84:y:2017:i:1:p:297-316
    DOI: 10.1002/soej.12211
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    Cited by:

    1. McMichael, Benjamin, 2017. "Beyond Physicians: The Effect of Licensing and Liability Laws on the Supply of Nurse Practitioners and Physician Assistants," Working Papers 07538, George Mason University, Mercatus Center.
    2. Shishir Shakya & Joshua K. Bedi & Alicia Plemmons, 2024. "Healthcare Workforce Shortages and Job Autonomy: Nurse Practitioners and Entrepreneurship in the United States," Working Papers 24-08, Department of Economics, Appalachian State University.
    3. 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.
    4. Dustin Chambers & Colin O’Reilly, 2022. "The economic theory of regulation and inequality," Public Choice, Springer, vol. 193(1), pages 63-78, October.
    5. Noghanibehambari, Hamid & Fletcher, Jason, 2023. "Long-Term Health Benefits of Occupational Licensing: Evidence from Midwifery Laws," Journal of Health Economics, Elsevier, vol. 92(C).
    6. Shishir Shakya & Alicia Plemmons, 2020. "Does Scope of Practice Affect Mobility of Nurse Practitioners Serving Medicare Beneficiaries?," Journal of Labor Research, Springer, vol. 41(4), pages 421-434, December.
    7. Kanazawa, Mark Tooru, 2023. "The Efficiency of Occupational Licensing during the Gilded and Progressive Eras: Evidence from Judicial Review," The Journal of Economic History, Cambridge University Press, vol. 83(4), pages 1221-1252, December.
    8. Yelowitz, Aaron & Ingram, Samuel J., 2021. "How Does Occupational Licensing Affect Entry into the Medical Field? An Examination of EMTs," IZA Discussion Papers 14071, Institute of Labor Economics (IZA).
    9. Laura Barrie Smith, 2022. "The effect of nurse practitioner scope of practice laws on primary care delivery," Health Economics, John Wiley & Sons, Ltd., vol. 31(1), pages 21-41, January.
    10. Guo, Jiapei & Kilby, Angela E. & Marks, Mindy S., 2024. "The impact of scope-of-practice restrictions on access to medical care," Journal of Health Economics, Elsevier, vol. 94(C).
    11. Kihwan Bae & Edward Timmons, 2023. "Now You Can Take It with You: Effects of Occupational Credential Recognition on Labor Market Outcomes," Working Papers 23-03, Department of Economics, West Virginia University.
    12. 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).
    13. Peter T. Leeson & Henry A. Thompson, 2023. "Public choice and public health," Public Choice, Springer, vol. 195(1), pages 5-41, April.
    14. Traczynski, Jeffrey & Udalova, Victoria, 2018. "Nurse practitioner independence, health care utilization, and health outcomes," Journal of Health Economics, Elsevier, vol. 58(C), pages 90-109.
    15. Suyoun Han & Morris M. Kleiner, 2021. "Analyzing the Influence of Occupational Licensing Duration and Grandfathering on Wage Determination," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 60(2), pages 147-187, April.

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