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What is the objective of professional licensing? Evidence from the US market for lawyers

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  • Pagliero, Mario

Abstract

According to public interest theory, professional licensing solves the lemon problem generated by asymmetric information. In contrast, the capture theory claims that licensing aims at increasing professional salaries by restricting supply. This paper shows that the two theories can be identified using data from one regulated profession and provides an empirical application to the US market for entry level lawyers. The empirical results support capture theory.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:indorg:v:29:y:2011:i:4:p:473-483
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