What Explains Occupational Licensing?

  • 06 Apr 2100
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Public choice theory has long been the dominant lens through which economists and other scholars have explained the origin and operation of occupational licensing. According to the public choice account, practitioners favor licensing because they want to reduce competition and drive up their own wages. Nunn and Scheffler argue that this account has been overstated and can distract from some of the most important harms of licensing, as well as from potential solutions. The authors then discuss three specific ways in which this is the case. Finally, Nunn and Scheffler describe findings from related research they have conducted, focusing on licensing revenues as well as issues specific to the health-care sector.

Learning objectives:

  • Better understanding of the appropriate scope for public choice and other explanations of occupational licensure
  • Awareness of relevant evidence and research on the political economy of licensure
  • Better understanding of new research on licensing revenues and health-care policy


Ryan Nunn, Policy Director of The Hamilton Project, Brookings Institution

Gabriel Scheffler, Associate Professor of Law, University of Miami School of Law

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