The Politics of Professionalism: Reappraising Occupational Licensure and Competition Policy

Annual Review of Law and Social Science, Forthcoming

U of Maryland Legal Studies Research Paper No. 2017-11

23 Pages Posted: 8 Dec 2016  

Sandeep Vaheesan

Independent

Frank A. Pasquale III

University of Maryland Francis King Carey School of Law; Yale University - Yale Information Society Project

Date Written: December 6, 2016

Abstract

Elite economists and lawyers have united to criticize occupational licensing. They contend that licensure rules raise consumer prices and restrict labor market entry and job mobility. The Obama Administration’s Council of Economic Advisers and Federal Trade Commission have joined libertarians and conservatives in calling for occupational regulations to be scaled back.

Billed as a bipartisan boost to market competition, this technocratic policy agenda rests on thin empirical foundation. Studies of the wage effects of licensing rarely couple this analysis of its putative “costs” with convincing analysis of the benefits of the professional or vocational education validated via licensure. While some licensing rules may be onerous and excessive, licensing rules are inadequate or underenforced in other labor markets. Furthermore, by limiting labor market entry, occupational licensing rules, like minimum wage and labor laws, can help raise and stabilize working and middle class wages — goals that many center-left critics of occupational licensing claim to support.

While current antitrust law provides an ideological framework for technocratic attacks on licensing, it is fundamentally unsuited for a fair evaluation of labor markets. Contemporary antitrust law’s arcane concept of efficiency reflects neither the legislative objectives animating the antitrust statutes, nor popular understanding of what competition policy should do. Occupational licensing should reflect an expansive conception of the public interest and be the product of democratic decisionmaking — not a technocratic mission to advance an esoteric notion of “efficiency.” Both the Department of Justice and the Federal Trade Commission should make occupational licensing and collective action by workers a much lower advocacy and enforcement priority.

Keywords: Occupational licensing, consumer protection, antitrust

Suggested Citation

Vaheesan, Sandeep and Pasquale, Frank A., The Politics of Professionalism: Reappraising Occupational Licensure and Competition Policy (December 6, 2016). Annual Review of Law and Social Science, Forthcoming; U of Maryland Legal Studies Research Paper No. 2017-11. Available at SSRN: https://ssrn.com/abstract=2881732

Sandeep Vaheesan (Contact Author)

Independent ( email )

No Address Available

Frank A. Pasquale III

University of Maryland Francis King Carey School of Law ( email )

500 West Baltimore Street
Baltimore, MD 21201-1786
United States
410-706-4820 (Phone)
410-706-0407 (Fax)

Yale University - Yale Information Society Project ( email )

127 Wall Street
New Haven, CT 06511
United States

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