Occupational Licensing and Accountant Quality: Evidence from the 150-Hour Rule

John Barrios

No 29318, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: I examine the effects of occupational licensing on the quality of Certified Public Accountants (CPAs). I exploit the staggered adoption of the 150-hour rule, which increases the educational requirements for a CPA license. The analysis shows that the rule decreases the number of entrants into the profession, reducing both low- and high-quality candidates. Labor market proxies for quality find no difference between 150-hour rule CPAs and the rest. Moreover, rule CPAs exit public accounting at similar rates and have comparable writing quality to their non-rule counterparts. Overall, these findings are consistent with the theoretical argument that increases in licensing requirements restrict the supply of entrants and do little to improve quality in the labor market.

JEL-codes: D45 I21 J2 K2 L51 M1 M12 M21 M4 M40 M41 M5 (search for similar items in EconPapers)
Date: 2021-10
New Economics Papers: this item is included in nep-acc, nep-edu and nep-lma
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Published as JOHN M. BARRIOS, 2022. "Occupational Licensing and Accountant Quality: Evidence from the 150‐Hour Rule," Journal of Accounting Research, vol 60(1), pages 3-43.

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Journal Article: Occupational Licensing and Accountant Quality: Evidence from the 150‐Hour Rule (2022)
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