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The Labor Market Consequences of Regulating Similar Occupations: the Licensing of Occupational and Physical Therapists

Author

Listed:
  • Jing Cai

    (W.E. Upjohn Institute for Employment Research)

  • Morris M. Kleiner

    (University of Minnesota)

Abstract

This study examines the influence of occupational licensing on two significant occupations that provide similar health care services: occupational therapists and physical therapists. Since many of the tasks that these occupations overlap, individuals in both occupations can have legal jurisdiction over these tasks. We examine how these two occupations interact with one another in the labor market on wage determination and employment. Unlike previous analyses of occupational licensing, our study evaluates two professions that are female dominated both within the vocations, and among its leadership. Our results show that the ability of physical therapists to have direct access to patients is associated with a reduction in hourly earnings for occupational therapists, suggesting there is substitution for certain overlapping service tasks across the two occupations. The ability of these two occupations to be mainly substitutes for one another provides new evidence on how the growing numbers of regulated occupations that provide similar tasks influence one another.

Suggested Citation

  • Jing Cai & Morris M. Kleiner, 2020. "The Labor Market Consequences of Regulating Similar Occupations: the Licensing of Occupational and Physical Therapists," Journal of Labor Research, Springer, vol. 41(4), pages 352-381, December.
    • Handle: RePEc:spr:jlabre:v:41:y:2020:i:4:d:10.1007_s12122-020-09309-0
    DOI: 10.1007/s12122-020-09309-0
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    References listed on IDEAS

    as
    1. Wing, Coady & Marier, Allison, 2014. "Effects of occupational regulations on the cost of dental services: Evidence from dental insurance claims," Journal of Health Economics, Elsevier, vol. 34(C), pages 131-143.
    2. 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.
    3. 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.
    4. Morris M. Kleiner & Allison Marier & Kyoung Won Park & Coady Wing, 2016. "Relaxing Occupational Licensing Requirements: Analyzing Wages and Prices for a Medical Service," Journal of Law and Economics, University of Chicago Press, vol. 59(2), pages 261-291.
    5. 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.
    6. Maury Gittleman & Morris M. Kleiner, 2016. "Wage Effects of Unionization and Occupational Licensing Coverage in the United States," ILR Review, Cornell University, ILR School, vol. 69(1), pages 142-172, January.
    7. 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.
    8. Milton Friedman & Simon Kuznets, 1945. "Income from Independent Professional Practice," NBER Books, National Bureau of Economic Research, Inc, number frie54-1.
    9. Nicola Persico, 2015. "The Political Economy of Occupational Licensing Associations," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 31(2), pages 213-241.
    10. Suyoun Han & Morris M. Kleiner, 2016. "Analyzing the Influence of Occupational Licensing Duration and Grandfathering on Labor Market Outcomes," NBER Working Papers 22810, National Bureau of Economic Research, Inc.
    11. Morris M. Kleiner & Kyoung Won Park, 2010. "Battles Among Licensed Occupations: Analyzing Government Regulations on Labor Market Outcomes for Dentists and Hygienists," NBER Working Papers 16560, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Ben Posmanick & Alex Obie & Bobby Chung, 2024. "Licensed Professionals and Corporate Board Performance: The Effect of the Sarbanes-Oxley Act on the Audit Committee," Working Papers 2024-03, University of South Florida, Department of Economics.
    2. 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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    More about this item

    Keywords

    Occupational licensing; Wage and employment determination; Interaction of occupations;
    All these keywords.

    JEL classification:

    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy

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