Occupational Restrictions and the Quality of Service Received: Some Evidence

Advocates of occupational licensing have been so successful with legislators that currently more than eighty occupations are licensed or restricted at some level of government. The majority of these occupations are licensed in most states with as many as sixty occupations licensed in a single state 7.' As of 1969, ten percent of U. S. national income originated in occupationally restricted labor markets.2 Licensed occupations hold a strategic position among all occupations in that they include all traditional professions and most skilled trades. Restrictions on number of practitioners are often imposed by such methods as licensing, limiting training facilities and imposition of union strictures. Occupational licensing regulation exists primarily at the state government level; however, significant restriction also occurs at national and municipal levels. The rationale of such regulation, at least as presented to legislative bodies, is that it raises the quality level of services for two explicit purposes. First occupational regulation provides a standard by which professional competence may be judged helping to avoid negative third party effects which may result from incompetent practitioners; for example, licensing of Certified Public Accountants is, in part, rationalized as protecting investors who must rely on the accuracy of financial information produced and verified by accountants who are neither selected by, nor responsible to, the investors. The second purpose of such regulation is to provide a higher standard of quality; consumers are believed to be unable or unwilling to correctly evaluate