The Knee Center for the Study of Occupational Regulation (CSOR) virtually held the second Emerging Scholars Conference from June 7^th to June 10^th 2021, with the sponsorship of the Institute for Humane Studies. The goal of the conference was to provide a forum for discussion and feedback on occupational regulation research while bringing scholars and policy analysts together to consider the implications for public policy.

CSOR Research Affiliate Darwyyn Deyo took the lead to establish a mentor-mentee workshop throughout the conference. The workshop was designed as a learning process for the presenting scholars. The scholars received academic advice and additional scholastic resources from their assigned mentor to improve and expand upon their continued research.

Below are summaries of the presentations. For more information on the papers, presentations, and conference please email our Outreach & Public Relations Coordinator Alexis Schumacher at aschumacher@francis.edu.

Tingting Zhang and Mengjie Lyu: Occupational licensing in China: The effects on wages and benefits

A previous study suggests that licensing is associated with an average of 15 percent higher wages in China (Chi, Kleiner, and Qian 2017). In the present study, we documented the changing landscape of occupational regulation in China over the past two decades. Using national representative data collected in 2014 and 2016, we find a pay premium of 0.116 log points for those with an occupational license or certification compared to those without one a decade later. In addition, licensed workers benefit more from their licensing status in access to employment benefits, such as health, maternal, injury, unemployment insurance, housing subsidy, and pension.

Bobby Chung and Jian Zou: Teacher licensing, teacher supply, and student outcomes: Evidence from the recent nationwide reform

A performance-based examination that requires semester-long preparation of prospective PreK-12 teachers has gained popularity across the nation in recent years. By 2018, nine states had mandated the assessment for initial teacher licensure to improve the pedagogy of new teachers. This research offers the first causal evidence about the effects of this nationwide initiative on teacher supply and student outcomes of new teachers, leveraging the quasi-experimental setting of different adoption timing by states. Analyzing the graduation data in the Integrated Postsecondary Education Data System from 2011 to 2019, we find that the new license requirement reduced the number of graduates majoring in education by 17.4%. We also find that the black representation of new teacher graduates decreased significantly in higher-selective universities, with a magnitude between -1 to -1.8 percentage points. For student outcomes, contrary to the policy intention, the license requirement had negative impacts on the students of new teachers. We analyze the restricted-use data of the National Assessment of Educational Progress from 2009 to 2017 that contains the test scores of a nationally representative sample of students. We find that students of new teachers in the reform states scored significantly lower in Reading and Mathematics than those in the non-reform states. The negative impact was stronger for students at higher ability percentiles.

Tanner Corley: License to Exclude

License to Exclude: Minority Barbers in Arkansas,” explores the cartelization of the barber industry in Arkansas during the progressive era. Predominantly white union barbers, with the goal of increasing wages and decreasing competition, implemented voluntary regulations that would be self-enforced by the union. African Americans and other minority barbers who often had more success than white barbers prior to unionization tended to ignore these regulations, destabilizing the cartel. Lacking an enforcement mechanism with actual teeth, white union barbers turned to the state in an attempt to eliminate what they saw as “unfair competition.” Finding success in the Arkansas legislature, rent-seeking union barbers captured control of the regulatory apparatus and the cartel they desired. By implementing a licensing law and creating the Board of Barber Examiners, established barbers were able to give themselves a stark advantage over future entries into the profession. Furthermore, the board consisted of union barbers who were able to establish further regulations and deliver examinations over the years. Though the barber licensing law and its regulations were racially neutral, its effect on minority barbers was detrimental. African Americans failed to pass barber licensing exams at an equivalent rate as their white counterparts, and the number of black barbers in Arkansas decreased significantly over the decade that the regulations were implemented. Given that the licensing law was implemented during the 1930s, African Americans and other minorities lacked equal opportunities and often had lower literacy rates, educational opportunities, and access to capital. These disparate opportunities excluded an unknowable amount of minority barbers who could have been successful prior to licensure. Taking into account the progressive era tactics and fervor of the Journeyman Barber Union, this paper attempts to explain how the emerging cartel was able to maintain its privileges over time and why the new regulations, though beneficial to cartel members, were detrimental to minorities.

Jason Hicks: The Historical Origins and Evolution of Criminal Records-Occupational Licensing Requirements

We collected data on the origins and evolution of state laws affecting the ability of people with criminal records to be issued an occupation license. The data range from year of initial licensure, which occurred as early as the mid-19th century, to 2020 for thirty occupations ranging across different industries, but currently requiring licensure in all states. Additionally, we collected data on universal criminal records-occupational licensing (CROL) requirements, which are requirements that apply to all occupations requiring licensure in a state. These requirements were typically enacted in states from the mid-1970s through the late-2010s. The CROL requirements we collected include (1) good moral character clauses, which allow licensing authorities to reject applicants who are deemed to not be of good moral character, (2) criminal records restrictions, which prevent an individual from being issued an occupational license due to a previous conviction, (3) the requirement of a relationship between an offense and the tasks and duties of an occupation, (4) consideration of rehabilitation, (5) ability to appeal licensure rejection, and (6) limitations on scope of inquiry, which limit the ability of licensing authorities to consider certain criminal records. We will describe how the distribution of CROL requirements varies across states, occupations, and industries. Additionally, we will describe how the stringency of the requirements have changed through time. We intend to use the data to examine the effects of different CROL requirements on labor market outcomes of minority populations who have disproportionate felony conviction and incarceration rates.

Protik Nandy: The Impact of Licensing Requirements on the wages of Barbers in the state of Tennessee: An evaluation using the difference-in-difference approach

This novel study uses the difference -in-difference approach to exploit variation across groups that receive treatment at different times to study the extent and influence of occupational licensing on Barbers in the state of Tennessee. The inconsistency of requirements for Barbers to obtain an occupational license effective June 2015, requiring a twelfth-grade education or equivalent for a Tennessee license being valid, basically creates an occupational barrier, by restricting entry and reducing competition and thereby leading to rising wages and closing of some of the shops. Contrary to what often being assumed the results suggests that this kind of disparity creates variations in earnings or earning potentials. Using the state level data pre and post 2015 and the treatment effect we look at the effect of such practices on Barbering through law governing the practices and rules as proposed by the Tennessee Cosmetology board on wages. The findings implicate that the rules are being drafted to protect the existing license holder rather than promotion of public health or public safety. The paper also looks at one of the case studies and suggests some of the policy implication and reforms that could essentially reduce wage reduction and promote greater competition leading to better consumer production and higher quality.

Ilya Kukaev: Regulating overly-regulated occupations: the case of public notaries in Russia

Some licensed occupations may face additional restrictions on the number of practitioners. Not only Russia licenses public notaries, but federal subjects impose caps on both the number of licensed practitioners and the fees they charge. Using data sets from 2017 and 2021 of all public notaries in Russia and comparing variation in the changes of the caps, this paper explores effects of the cap legislation changes on the numbers of those who passed a qualifying exam and active notaries in fixed effects models. Preliminary results show a positive one to one ratio of an increase in the cap size for active notaries and mixed effects on the number of people who passed the qualifying exam. In particular, in a subset of regions where the caps are not met, a one unit increase in cap size results in a one unit increase for number of active notaries and a one unit decrease for the number of people who passed the exam. Furthermore, in a subset of regions where the caps are met, a one unit increase in cap size results in a one unit increase in number of active notaries whereas the number of people who passed the exam increases by 3 units. Given almost non-existent migration patterns for public notaries across the regions, the paper argues that the cap sizes are low and can be increased further with a possibility of future partial elimination.

Yair Osheroff: Examining Occupational Licensing in an Institutional Context

Occupational Licensing (OL) is one of the most prominent and impactful labor market regulations across developed economies. Nevertheless, the variance of OL between states, and its broad institutional settings is yet underexplored. This study addresses these gaps by analyzing OL with three relevant features in the labor market: labor organization, government size, and vocational education. The study first introduces the great variance in the share of licensed workforce between 31 developed democratic states, that ranges from 14% to 33%. Then, by studying macro-level data of the states, the study finds several relations of OL with the other features. It shows that the broader is the scope of OL, the lower is the scope of labor organization and the smaller is the government size; while the broader is the scope of OL the more developed is the vocational education, and vice versa. Drawing on the literature of regulatory governance and institutional political economy, the paper suggests that these correlations are results of complementarity and substitutionary between OL and the other institutions in the labor market. With regard to the negative correlation of OL and labor organization, it suggests that OL materializes organization of occupations, that substitutes the more traditional labor organization materialized by unions. With regard to the negative correlation of OL and government size, it suggests that OL exercises control over occupations that substitutes the other more direct and traditional forms of governmental control, as employment and budgeting that determine its size. With regard to the positive correlation of OL and vocational education, it suggests that practitioners that go through vocational education are more likely to promote and achieve licensing for their profession, while in addition licensing promotes participation in vocational education in the licensed occupations.

Andrew Smith and Sara Markowitz: Nurse Practitioner Oversight Ratios and Labor Market Outcomes

Nurse Practitioners (NPs) play an important role in the United States’ healthcare system; however, their ability to practice is often constrained by restrictive scope of practice (SOP) regulations. Many states’ SOP regulations include a physician oversight ratio, which limits the number of full-time equivalent NPs with whom a physician may legally enter into a supervisory, delegative, or collaborative relationship. Previous research has shown that more restrictive SOP laws do not improve health outcomes. Studies looking at the effect of SOP stringency on labor market outcomes have reached mixed results; some studies have found more permissive regulatory environments to be associated with increased NP labor supply, while others have found no or little difference. However, to date, no study has specifically considered the impact of physician oversight ratios. In this study, we evaluate the impact of physician oversight ratios on NP labor market outcomes. In recent decades, several states have lowered and eliminated their oversight ratios in addition to transitioning to full practice authority. We exploit this state-by-state variation over time using difference-in-difference, event study, and synthetic control methodologies. We further examine how these regulatory changes affect rural and health professional shortage areas in particular. Our findings will inform policy debates about healthcare professional licensing.

CSOR also made two announcements to commence the conference: the addition of two new research affiliates (Tingting Zhang and Bobby Chung), as well as a newly appointed visiting scholar (Darwyyn Deyo).

Interested in learning more about occupational regulation? Would you like to attend a CSOR conference in the future? Please contact Vice President of Government Relations and Public Affairs Alanna Wilson at awilson@francis.edu