occupational licensing, regulation, service quality
Consumer Protection Law | Law
Grease or Grit? International Case Studies of Occupational Licensing and Its Effects on Efficiency and Quality. Edited by Morris M. Kleiner and Maria Koumenta. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research, 2022. 174 pp. ISBN 9780880996860, $20 (paperback); ISBN 9780880996877, $9.99 (e-book).
Occupational licensing remains poorly understood. This is true even after decades of illuminating empirical work by Morris Kleiner, one of the authors of Grease or Grit? International Case Studies of Occupational Licensing and Its Effects on Efficiency and Quality, showing that licensing—a government-granted right to perform a particular service—raises prices to consumers, restricts entry into an occupation, reduces interstate mobility of the workforce, and contributes to income inequality. And it remains true after economists studying the phenomenon from other jurisdictions, including his British co-author Maria Koumenta, have shown the same outcomes.
One important missing piece of the licensing puzzle is that we know little about licensing’s payoff. It is not enough to criticize occupational licensing as costly to consumers and workers if we do not know whether its purported benefits, such as safer, better, and more professional service, are worth it. This side of the cost-benefit analysis of professional licensing has been lacking because unlike wages, prices, and employment, service quality is almost impossible to measure objectively. How can researchers code for good legal advice? Which architects make more beautiful buildings? How can a physician’s bedside manner—or surgical competence, for that matter—be reduced to a numerical score and empirically evaluated? Without hard evidence about quality, critics of licensing have few concrete measures to point to when proponents of licensure (usually the professions themselves) seek regulation that in theory (and maybe only in theory) leads to better professional service.
Rebecca H. Allensworth,
Book Review: Grease or Grit? ILR Review.
Available at: https://scholarship.law.vanderbilt.edu/faculty-publications/1348