Occupational Licensing - A Framework for Analysis
Arizona State University College of Law
Arizona State Law Journal, p. 189, 1979
There is a long and traditional acceptance of occupational licensing. Occupational licensing has not only persisted for a long period of time, but it has grown significantly in recent decades. A fundamental reason is probably that many people think that occupational licensing benefits society. This belief is an aspect of the more general public belief in the efficacy of governmental regulation.
The fundamental question is whether this belief in the efficacy of occupational licensing is warranted. The question is initially one of economic theory and ultimately an empirical one. The issue is whether a net public benefit results from this type of regulatory activity-in economic terms whether there is a net welfare gain. The framework for analysis involves an examination of the possible benefits of licensing and the possible anticompetitive effects. In addition, any tradeoff must consider the administrative costs of the governmental regulatory mechanism. The thesis of this essay is that occupational licensing has various anticompetitive effects that impose substantial costs on the consumers of these services in particular and society in general, and that these costs are likely to outweigh the benefits, which may be obtained by less costly alternatives in many cases and which are not realized in other cases.
Number of Pages in PDF File: 14
Keywords: occupational licensing, competition, economics
Date posted: August 16, 2009
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