What Occupational Licensing Requirements Protect the Public? Evidence from the Legal Profession

Abstract

I investigate the types of occupational licensing requirements that protect the public. To do so, I employ professional discipline as a measure of harm and exploit considerable state-level variation in distinctive licensing requirements for American lawyers. Using data from 34 states between 1984 and 2019, I find evidence suggesting that the only requirements that reduce harm are those that restrict entry for certain high-risk individuals. Even with these requirements, however, it takes over a decade after a lawyer obtains a license for any noticeable reduction in harm to materialize, and the cumulative impact on harm is small in absolute terms.

Keywords: J44, D18, J21, L43, K23 Occupational Licensing, Public Protection, Professional Discipline, Legal Profession, Bar Exam

JEL Classification: J44, D18, J21, L43, K23