A new NBER working paper from Morris Kleiner and Kyoung Won Park looks at the struggle between dentists and dental hygienists, both of which are covered by occupational licenses. Here is the abstract:
….In this study, we examine dentists and dental hygienists, who are both universally licensed and provide complementary services to patients, but may also be substitutes as service providers…. We find that states that allow hygienists to be self-employed have about 10 percent higher earnings, and that dentists in those states have lower earnings and slower employment growth… Our estimates are consistent with the view that winning the policy and legal battle in the legislature and courts on the independence of work rules matters in the labor market for these occupations.
As I’ve argued before, occupational licensing that benefit dentists at the expense of dental hygienists should be an issue that motivates liberal opposition. After all, this is a highly regressive transfer to a male dominated, higher educated, higher paid job from a female dominated, lower educated, lower paid job. Yet aside from tireless occupational licensing critic Matt Yglesias, occupational licensing receives relatively little attention. It’s not just liberals though, conservatives also don’t seem to care about this issue as much as they should.
Morris Kleiner has done much to try and focus labor economists on the institution of occupational licensing, but for the most part the research in this area is done by a handful of economists, and it still receives vastly less attention than the much less prevalent and economically important minimum wages.
I don’t know what the regulatory answer to occupational licensing is, but I’d be interested in proposals to subject these laws to more anti-trust scrutiny, or perhaps legislation requiring state and locally mandated licensing to be subject cost-benefit analysis.