IDEAS home Printed from https://ideas.repec.org/p/cca/wpaper/53.html
   My bibliography  Save this paper

The Impact of Potential Labor Supply on Licensing Exam Difficulty

Author

Listed:
  • Mario Pagliero

Abstract

Entry into licensed professions requires meeting competency requirements, typ- ically 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

  • Mario Pagliero, 2007. "The Impact of Potential Labor Supply on Licensing Exam Difficulty," Carlo Alberto Notebooks 53, Collegio Carlo Alberto, revised 2013.
    • Handle: RePEc:cca:wpaper:53
    as

    Download full text from publisher

    File URL: https://www.carloalberto.org/wp-content/uploads/2018/11/no.53.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Milton Friedman & Simon Kuznets, 1945. "Income from Independent Professional Practice," NBER Books, National Bureau of Economic Research, Inc, number frie54-1, 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.
    3. 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.
    4. Morris M. Kleiner, 2000. "Occupational Licensing," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 189-202, Fall.
    5. 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.
    6. 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.
    7. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
    8. 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.
    9. 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.
    10. 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.
    11. 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.
    12. 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.
    13. Andrews,Donald W. K. & Stock,James H. (ed.), 2005. "Identification and Inference for Econometric Models," Cambridge Books, Cambridge University Press, number 9780521844413, November.
    14. 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.
    15. 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.
    16. 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.
    17. Simon Rottenberg, 1980. "Occupational Licensure and Regulation," Books, American Enterprise Institute, number 968900, September.
    18. 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.
    19. 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.
    20. 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.
    21. 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.
    22. Morris M. Kleiner, 2006. "Licensing Occupations: Ensuring Quality or Restricting Competition?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number lo.
    23. 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.
    24. 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.
    25. 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.
    26. 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.
    27. 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.
    28. 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.
    29. 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.
    30. 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.
    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. Maria Koumenta & Mario Pagliero, 2017. "Occupational Licensing in the European Union: Coverage and Wage Effects," Carlo Alberto Notebooks 525, Collegio Carlo Alberto.
    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. Pagliero, Mario, 2018. "Occupational Licensing, Labor Mobility, and the Unfairness of Entry Standards," CEPR Discussion Papers 13076, C.E.P.R. Discussion Papers.
    5. 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.
    6. 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.
    7. Maria Koumenta & Mario Pagliero, 2019. "Occupational Regulation in the European Union: Coverage and Wage Effects," British Journal of Industrial Relations, London School of Economics, vol. 57(4), pages 818-849, December.
    8. 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.

    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. 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. 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.
    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. Koumenta, Maria & Pagliero, Mario & Rostam-Afschar, Davud, 2022. "Occupational Regulation, Institutions, and Migrants’ Labor Market Outcomes," Labour Economics, Elsevier, vol. 79(C).
    6. Marek Zapletal, 2019. "The Effects of Occupational Licensing: Evidence from Business‐Level Data," British Journal of Industrial Relations, London School of Economics, vol. 57(4), pages 894-918, December.
    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. 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.
    9. 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.
    10. 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).
    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. Chiara Farronato & Andrey Fradkin & Bradley J. Larsen & Erik Brynjolfsson, 2024. "Consumer Protection in an Online World: An Analysis of Occupational Licensing," American Economic Journal: Applied Economics, American Economic Association, vol. 16(3), pages 549-579, July.
    14. Morikawa, Masayuki, 2018. "Occupational licenses and labor market outcomes in Japan," Japan and the World Economy, Elsevier, vol. 48(C), pages 45-56.
    15. 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.
    16. 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.
    17. 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).
    18. 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.
    19. Noghanibehambari, Hamid & Fletcher, Jason, 2023. "Long-Term Health Benefits of Occupational Licensing: Evidence from Midwifery Laws," Journal of Health Economics, Elsevier, vol. 92(C).
    20. Niels Philipsen, 2011. "Professional Licensing and Self-regulation in Europe and China: A Law and Economics Perspective," Chapters, in: Michael Faure & Xinzhu Zhang (ed.), Competition Policy and Regulation, chapter 9, Edward Elgar Publishing.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:cca:wpaper:53. 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: Giovanni Bert (email available below). General contact details of provider: https://edirc.repec.org/data/fccaait.html .

    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.