Occupational Licensing and the Limits of Public Choice Theory

Administrative Law Review Accord (April 18, 2019).

U of Penn, Inst for Law & Econ Research Paper No. 19-18

18 Pages Posted: 9 May 2019

See all articles by Gabriel Scheffler

Gabriel Scheffler

University of Miami School of Law

Ryan Nunn

Brookings Institution

Date Written: April 18, 2019

Abstract

Public choice theory has long been the dominant lens through which economists and other scholars have viewed occupational licensing. According to the public choice account, practitioners favor licensing because they want to reduce competition and drive up their own wages. This essay argues that the public choice account has been overstated, and that it ironically has served to distract from some of the most important harms of licensing, as well as from potential solutions. We emphasize three specific drawbacks of this account. First, it is more dismissive of legitimate threats to public health and safety than the research warrants. Second, it places disproportionate emphasis on those professions for which the justification for licensing seems weakest, rather than on those for which the justification is stronger. Third, it puts an inordinate focus on whether an occupation is licensed, rather than how it is licensed. Judges and policymakers should bear these limitations in mind when evaluating legal challenges or proposed reforms to licensing laws.

Keywords: occupational licensing, occupational regulation, consumer protection, public choice theory, regulatory theory, administrative law, regulatory design, regulation, law and political economy, state and local goverment

JEL Classification: K21, K23

Suggested Citation

Scheffler, Gabriel and Nunn, Ryan, Occupational Licensing and the Limits of Public Choice Theory (April 18, 2019). Administrative Law Review Accord (April 18, 2019).; U of Penn, Inst for Law & Econ Research Paper No. 19-18. Available at SSRN: https://ssrn.com/abstract=3384780 or http://dx.doi.org/10.2139/ssrn.3384780

Gabriel Scheffler (Contact Author)

University of Miami School of Law ( email )

1311 Miller Dr.
Coral Gables, FL FL 33146
United States

Ryan Nunn

Brookings Institution ( email )

1775 Massachusetts Ave, NW
Washington, DC 20036
United States

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