Relaxing Occupational Licensing Requirements: Analyzing Wages and Prices for a Medical Service

Morris M. Kleiner, Allison Marier, Kyoung Park and Coady Wing

No 19906, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Occupational licensing laws have been relaxed in a large number of U.S. states to give nurse practitioners the ability to perform more tasks without the supervision of medical doctors. We investigate how these regulations may affect wages, employment, costs, and quality of providing certain types of medical services. We find that when only physicians are allowed to prescribe controlled substances that this is associated with a reduction in nurse practitioner wages, and increases in physician wages suggesting some substitution among these occupations. Furthermore, our estimates show that prescription restrictions lead to a reduction in hours worked by nurse practitioners and are associated with increases in physician hours worked. Our analysis of insurance claims data shows that the more rigid regulations increase the price of a well-child medical exam by 3 to 16 %. However, our analysis finds no evidence that the changes in regulatory policy are reflected in outcomes such as infant mortality rates or malpractice premiums. Overall, our results suggest that these more restrictive state licensing practices are associated with changes in wages and employment patterns, and also increase the costs of routine medical care, but do not seem to influence health care quality.

JEL-codes: D02 D42 D47 H7 I1 I12 I18 I28 J0 J18 (search for similar items in EconPapers)
Date: 2014-02
New Economics Papers: this item is included in nep-hea, nep-lab and nep-lma
Note: IO LE LS
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Citations: View citations in EconPapers (9)

Published as Morris M. Kleiner & Allison Marier & Kyoung Won Park & Coady Wing, 2016. "Relaxing Occupational Licensing Requirements: Analyzing Wages and Prices for a Medical Service," The Journal of Law and Economics, vol 59(2), pages 261-291.

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