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Relaxing Occupational Licensing Requirements: Analyzing Wages and Prices for a Medical Service

Author

Listed:
  • Morris M. Kleiner
  • Allison Marier
  • Kyoung Won Park
  • Coady Wing

Abstract

Occupational licensing laws have been relaxed in a large number of U.S. states to give nurse practitioners the ability to perform more tasks without the supervision of medical doctors. We investigate how these regulations may affect wages, employment, costs, and quality of providing certain types of medical services. We find that when only physicians are allowed to prescribe controlled substances that this is associated with a reduction in nurse practitioner wages, and increases in physician wages suggesting some substitution among these occupations. Furthermore, our estimates show that prescription restrictions lead to a reduction in hours worked by nurse practitioners and are associated with increases in physician hours worked. Our analysis of insurance claims data shows that the more rigid regulations increase the price of a well-child medical exam by 3 to 16 %. However, our analysis finds no evidence that the changes in regulatory policy are reflected in outcomes such as infant mortality rates or malpractice premiums. Overall, our results suggest that these more restrictive state licensing practices are associated with changes in wages and employment patterns, and also increase the costs of routine medical care, but do not seem to influence health care quality.

Suggested Citation

  • Morris M. Kleiner & Allison Marier & Kyoung Won Park & Coady Wing, 2014. "Relaxing Occupational Licensing Requirements: Analyzing Wages and Prices for a Medical Service," NBER Working Papers 19906, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:19906
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    References listed on IDEAS

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    1. Timothy G. Conley & Christopher R. Taber, 2011. "Inference with "Difference in Differences" with a Small Number of Policy Changes," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 113-125, February.
    2. 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.
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    Citations

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    Cited by:

    1. Stange, Kevin, 2014. "How does provider supply and regulation influence health care markets? Evidence from nurse practitioners and physician assistants," Journal of Health Economics, Elsevier, vol. 33(C), pages 1-27.
    2. 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.
    3. repec:kap:regeco:v:52:y:2017:i:2:d:10.1007_s11149-017-9333-y is not listed on IDEAS
    4. Sara Markowitz & E. Kathleen Adams & Mary Jane Lewitt, PhD, CNM & Anne Dunlop, MD, 2016. "Competitive Effects of Scope of Practice Restrictions: Public Health or Public Harm?," NBER Working Papers 22780, National Bureau of Economic Research, Inc.
    5. repec:iza:izawol:journl:y:2017:n:392 is not listed on IDEAS
    6. Timmons, Edward Joseph, 2017. "The effects of expanded nurse practitioner and physician assistant scope of practice on the cost of Medicaid patient care," Health Policy, Elsevier, vol. 121(2), pages 189-196.
    7. repec:pal:easeco:v:44:y:2018:i:1:d:10.1057_eej.2016.4 is not listed on IDEAS
    8. Anderson, D. Mark & Brown, Ryan & Charles, Kerwin Kofi & Rees, Daniel I., 2016. "The Effect of Occupational Licensing on Consumer Welfare: Early Midwifery Laws and Maternal Mortality," IZA Discussion Papers 10074, Institute for the Study of Labor (IZA).
    9. repec:eee:irlaec:v:50:y:2017:i:c:p:50-59 is not listed on IDEAS
    10. MORIKAWA Masayuki, 2017. "Occupational Licenses and Labor Market Outcomes," Discussion papers 17078, Research Institute of Economy, Trade and Industry (RIETI).
    11. Morris M. Kleiner, 2016. "Battling over Jobs: Occupational Licensing in Health Care," American Economic Review, American Economic Association, vol. 106(5), pages 165-170, May.
    12. Alexander, Diane & Schnell, Molly, 2016. "Just What the Nurse Practitioner Ordered: Independent Prescriptive Authority and Population Mental Health," Working Paper Series WP-2017-8, Federal Reserve Bank of Chicago.
    13. repec:eee:jhecon:v:55:y:2017:i:c:p:201-218 is not listed on IDEAS

    More about this item

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • I1 - Health, Education, and Welfare - - Health
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J0 - Labor and Demographic Economics - - General
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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