Hostname: page-component-745bb68f8f-hvd4g Total loading time: 0 Render date: 2025-01-23T14:03:57.109Z Has data issue: false hasContentIssue false
  • English
  • Français

Specialization and Regulation: The Rise of Professionals and the Emergence of Occupational Licensing Regulation

Published online by Cambridge University Press:  26 August 2005

MARC T. LAW  and
SUKKOO KIM
MARC T. LAW
Affiliation:
Marc T. Law is Assistant Professor, Department of Economics, University of Vermont, Old Mill Building, 94 University Place, Burlington, VT 05405-0114. E-mail: [email protected].
SUKKOO KIM
Affiliation:
Sukkoo Kim is Associate Professor, Department of Economics, Washington University, Campus Box 1208, One Brookings Drive, St. Louis, MO 63130-4899; and Research Associate, NBER. E-mail: [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

During the Progressive Era, advances in knowledge and specialization led to the emergence of modern-day professions. This growth in professions was accompanied by the adoption of occupational licensing regulation. In this article we explore the origins and effects of occupational licensing regulation during this period. Although most studies argue that occupational licensing regulation is adopted to restrict entry and reduce competition, the evidence from the Progressive Era suggests that regulation arose to improve markets as specialization and advances in knowledge made it increasingly difficult for consumers to judge the quality of professional services.

Not long ago, the Governor of a midwestern state was approached by representatives of a particular trade anxious to enlist the Governor's support in securing passage of legislation to license their trade.“Governor,” the men said, “passage of this licensing act will ensure that only qualified people will practice this occupation; it will eliminate charlatans, incompetents or frauds; and it will thereby protect the safety and welfare of the people of this state.”The governor, from long experience, was somewhat skeptical. “Gentlemen,” he asked, “are you concerned with advancing the health, safety and welfare of the people under the police powers of the state, or are you primarily interested in creating a monopoly situation to eliminate competition and raise prices?”The spokesman for the occupational group smiled and said, “Governor, we're interested in a little of each.”Council of State GovernmentsCouncil of State Governments, Occupational Licensin g, p. 1.

Type
ARTICLES
Information
The Journal of Economic History , Volume 65 , Issue 3 , September 2005 , pp. 723 - 756
Copyright
© 2005 The Economic History Association

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Akerlof George. 1970 “The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism.” Quarterly Journal of Economics 84, no. 3 488– 500.Google Scholar
Allison Paul D. 1984. Event History Analysis: Regression for Longitudinal Event Data, Beverly Hills, CA: Sage Publications,
Angrist Joshua, and Jonathan Guryan. March 2003. “Does Teacher Testing Raise Teacher Quality? Evidence from State Certification Requirements.” NBER Working Paper No. 9545, Cambridge, MA,
Arrow Kenneth J. 1963 “Uncertainty and the Welfare Economics of Medical Care.” American Economic Review 53, no. 5 941– 73.Google Scholar
Baker Samuel L. 1984 “Physician Licensure Laws in the United States, 1865–1915.” Journal of the History of Medicine and Allied Sciences 39, no. 2 173– 97.Google Scholar
Calvert Monte A. 1967. The Mechanical Engineer in America, 1830–1910: Professional Cultures in Conflict, Baltimore: Johns Hopkins University Press,
Carroll Sidney L., and Robert J. Gaston. 1981 “Occupational Restrictions and the Quality of Service Received: Some Evidence.” Southern Economic Journal 48, no. 4 959– 75.Google Scholar
Collins William J., and Melissa A. Thomasson. 2004 “The Declining Contribution of Socioeconomic Disparities to the Racial Gap in Infant Mortality Rates.” Southern Economic Journal 70, no. 4 746– 76.Google Scholar
Costa Dora L., and Richard H. Steckel. 1997. “Long-Term Trends in Health, Welfare, and Economic Growth in the United States.” In Health and Welfare During Industrialization, edited by Roderick Floud and Richard H. Steckel, 47– 89. Chicago: University of Chicago Press,
Council of State Governments. 1952. Occupational Licensing Legislation in the States, Chicago: Council of State Governments,
Council on Medical Education. 1920 “Medical Education in the United States.” Journal of the American Medical Association 76, no. 6 379– 88; vol.95, no. 7 1930 487– 524.
Cutler David M., and Ellen Meara. October 2001. “Changes in the Age Distribution of Mortality Over the 20th Century.” NBER Working Paper No. 8556,
Cutler David M., Ellen Meara, and Grant Miller. May 2004. “The Role of Public Health Improvements in Health Advance: The 20th Century United States.” NBER Working Paper No. 10511,
De Ville Kenneth Allen. 1990. Medical Malpractice in Nineteenth Century America: Origins and Legacy, New York: New York University Press,
Edwards Alba M. 1942. Comparative Occupation Statistics for the United States, 1870 to 1940, Washington, DC: GPO,
Feldman Roger, and James W. Begun. 1985 “The Welfare Cost of Quality Changes Due to Professional Regulation.” Journal of Industrial Economics 34, no. 1 17–32Google Scholar
Fishback Price V. 1998 “Operations of ‘Unfettered’ Labor Markets: Exit and Voice in American Labor Markets at the Turn of the Century,” Journal of Economic Literature 36, no. 2 722– 65.Google Scholar
Flexner Abraham. 1910. Medical Education in the United States and Canada: A Report to the Carnegie Foundation for the Advancement of Teaching, New York, NY: Carnegie Foundation,
Fogel Robert W. 1994 “Economic Growth, Population Theory, and Physiology: The Bearing of Long-Term Processes on the Making of Economic Policy.” American Economic Review 84, no. 3 369– 95.Google Scholar
Fraundorf Kenneth C. 1984 “Organized Dentistry and the Pursuit of Entry Control.” Journal of Health Politics, Policy, and Law 8, no. 4 759– 81.Google Scholar
Friedman Milton, and Simon Kuznets. 1945. Income from Independent Professional Practice, New York, NY: National Bureau of Economic Research,
Haas-Wilson Deborah. 1986 “The Effect of Commercial Practice Restrictions: The Case of Optometry.” Journal of Law and Economics 29, no. 1 165– 86.Google Scholar
Kim Sukkoo. 2001 “Markets and Multiunit Firms from an American Historical Perspec-tive.” Advances in Strategic Management 18 305– 26.Google Scholar
Kuznets Simon, and Dorothy S. Thomas, eds. 1965. Population Redistribution and Economic Growth: United States 1870–1950, Philadelphia: American Philosophical Society,
Lamoreaux Naomi, and Kenneth Sokoloff. May 1999. “Inventive Activity and the Market for Technology in the United States, 1840–1920.” NBER Working Paper No. 7107,
Leland Hayne. 1979 “Quacks, Lemons and Licensing: A Theory of Minimum Quality Standards.” Journal of Political Economy 87, no. 6 1328– 46.Google Scholar
Law Marc T. 2003 “The Origins of State Pure Food Regulation.” This JOURNAL 63, no 4 1103– 30.Google Scholar
Ludmerer Kenneth M. 1985 Learning to Heal: The Development of American Medical Education. New York, NY: Basic Books,
Merriam-Webster Inc. 1997. Merriam-Webster Dictionary, Springfield, MA: Merriam-Webster,
Olsen Reed Neil. 2000. “The Regulation of Medical Professions.” In Encyclopedia of Law and Economics, edited by Boudewijn Bouckaert and Gerrit De Geest, 1018– 54. London: Edward Elgar,
Price Derek J. deSolla. 1963. Little Science, Big Science, New York, NY: Columbia University Press,
Rothstein William. 1972. American Physicians of the Nineteenth Century: From Sects to Science, Baltimore: Johns Hopkins University Press,
Smith Hubert Winston. 1941 “Legal Responsibility for Medical Malpractice: The Legal Matrix of Medical Malpractice.” Journal of the American Medical Association 116, no. 16 942– 47; vol. 116, no. 19 1941 2149– 59; vol. 116, no. 24 1941 2670– 79; vol. 117, no. 1 1941 23– 33.Google Scholar
Society for the Promotion of Engineering Education. 1930. Report of the Investigation of Engineering Education: Volume I, Lancaster, PA: Lancaster Press,
Sokoloff Kenneth L. 1988 “Inventive Activity in Early Industrial America: Evidence from Patent Records, 1790–1846.” This JOURNAL 50, no. 4 363– 78.Google Scholar
Starr Paul. 1982. The Social Transformation of American Medicine: The Rise of a Sovereign Profession and the Making of a Vast Industry. New York, NY: Basic Books,
Stigler George. 1971 “The Theory of Economic Regulation.” Bell Journal of Economics and Management Science. 2, no. 1 3– 21.Google Scholar
U.S. Bureau of the Census. Census of Population. Washington, DC: GPO, various years.
U.S. Bureau of the Census. Mortality Statistics. Washington, DC: GPO, various years.
U.S. Department of Commerce. 2001. Statistical Abstract of the United States. Washington, DC: GPO,
U.S. Senate. 1934. “National Income, 1929–32.” Senate Document No. 124, 73rd Congress, 2nd Session, v. 9788,
Wallis John J., and Douglass C. North 1986. “Measuring the Transaction Sector of the American Economy, 1870–1970.” In Long Term Factors in American Economic Growth, edited by Stanley Engerman and Robert Gallman, 85– 148. Chicago: University of Chicago Press.
Weingast Barry. 1980. “Physicians, DNA Research Scientists, and the Market for Lemons.” In Regulating the Professions: A Public Policy Symposium, edited by Roger D. Blair and Stephen Rubin, 81– 91. Lexington, MA: DC Heath and Company,