Results for “occupational licensing”
55 found

Where is the licensing burden heaviest?

by Tyler Cowen January 25, 2014 at 2:24 am in

Adam Ozimek reports:

…consider the Institute for Justice’s excellent report on occupational licensing. The top 10 worst ranked jobs in terms of average licensing burden are as follows:

1. Preschool teacher

2. Athletic trainer

3. Earth driller

4. Cosmetologist

5. Barber

6. School bus driver

7. HVAC Contractor

8. Skin Care Specialist

9. Pest Control Applicator

10. Bus Driver

And from Virginia Postrel on Twitter:

Sting catches Charleston rickshaw driver giving illegal tour, $1,092 fine for talking history w/o a license http://buff.ly/1cTeo02 @ij

Here are previous MR posts on occupational licensing.

The Truss economic plan

by Tyler Cowen September 24, 2022 at 1:13 am in

On Friday [as indeed it happened], Ms. Truss’ government is expected to announce a series of tax cuts, including cutting taxes for new home purchases as well as reversing planned hikes in the corporate tax and cutting a recent increase in payroll taxes. It will also abolish limits on bonuses for bankers and allow fracking for shale gas across the U.K.

The measures come in addition to a big government spending plan to cap household and corporate energy bills this winter that could cost the U.K. government roughly £100 billion, equivalent to about $113 billion, over the next two years.

The goal is to spur growth in an economy facing weak growth and high inflation, partly brought on by an energy price shock from higher natural-gas prices from the war in Ukraine, as well as a U.S.-style labor shortage. Absent the government bailouts, economists warned that many Britons would be unable to pay their energy bills this coming winter and thousands of companies would go broke…

The government is also planning a deregulation drive, in particular in the finance sector, to try to bolster London’s role as a business hub.

Taken together, the Truss plan is a bold but risky gamble that the payoff from higher growth will more than offset the risks from a big expansion in the government’s deficit and debt at a time of high inflation and rising interest rates, which will increase the cost of servicing the debt and could shake investors’ confidence in the U.K. economy and its currency.

Here is more from the WSJ. Elsewhere Ryan Bourne covers the tax changes in more detail:

- the recent 1.25 percent employer and employee national insurance tax rises have been reversed;
- the basic rate of income tax would be cut from 20 percent to 19 percent;
- the highest 45 percent marginal income tax rate would be abolished entirely, making 40 percent the top official marginal rate band;
- stamp duty (the property transactions tax) on all transactions up to home values of £250,000 and £425,000 for first-time buyers has been scrapped;
- the planned increase in the corporate profits tax has been abandoned (so maintaining it at 19 percent);
- full and immediate expensing in the corporate tax code for the first £1 million invested in plant and machinery would be made permanent;
- new investment zones would be introduced, in which there would be a 100 percent first year enhanced capital allowance relief for plant and machinery and building and structures relief of 20 percent per year.

And on regulation:

new investment zones would encompass streamlining existing planning applications (and these are potentially big zones, if the councils and authorities in discussions are any guide – the Greater London Authority, for example);
environmental reviews would be shortened and reformed;
childcare deregulation proposals (probably on staffing and occupational licensing) are forthcoming;
new planning reforms for housing are forthcoming;
the onshore wind generator ban will be lifted;
the fracking moratorium has been lifted;
the cap on bankers’ bonuses will be abandoned;
agricultural regulation will be reformed;
the sugar tax and lots of other anti-obesity regulations will be abandoned;
the arduous tax rules on contractors known as IR35 will be scrapped;
all future tax policy will be reviewed through this prism of simplification;
there will be an expansion of the number of welfare claimants who must submit to more intensive work coaching with the aim of increasing their hours

The FT details the negative reaction from UK bond, equity, and currency markets. Furman and Buiter are very negative, Summers too. In my view, these are mostly good policies, but how will all that borrowing go over? And is the Bank of England up to doing the appropriate offsets? I will cover these policies as they unfold…

Labor Market Participation Rates and Male Incarceration Rates

by Alex Tabarrok October 31, 2021 at 7:25 am

In our textbook, Modern Principles, Tyler and I write

Another factor that may be important in explaining the decline in the labor force participation rate of less-skilled men is the rise in mass incarceration. The male incarceration rate in the United States increased from 200 per 100,000 in 1970 to nearly 1,000 per 100,000 at is peak in 2007, as shown in Figure 30.18. Incarceration doesn’t reduce the labor force participation rate directly because the rate is measured as the ratio of the labor force to the adult non-institutionalized population. But what happens to prisoners when they are released? It’s difficult to get a job with an arrest record let alone a prison record. In fact, due to occupational licensing, it’s illegal for ex-felons to work in many industries. Approximately 7% of prime-aged men have been incarcerated. Thus, the rising incarceration rates of the past could be causing some of today’s low labor force participation rates.

A recent paper provides some evidence: Felony history and change in U.S. Employment rates, estimates that “a 1 percentage point increase in the share of a state’s adult population with a felony history is associated with 0.3 percentage point increase in non-employment (being unemployed or not in the labor force) among those aged 18 to 54.”

What to Watch

by Alex Tabarrok September 14, 2021 at 8:13 am

A few things I have watched recently:

The Courier–a taut, spy drama about the true story of Greville Wynne, an ordinary British businessman who was recruited by the British and American spy services to courier information in the 1960s from Russian agent Oleg Penkovsky–information that proved crucial to the United States during the Cuban Missile Crisis. Stars Benedict Cumberbatch and Rachel Brosnahan. On Amazon Prime.

The Hitman’s Wife’s Bodyguard–I thought this action-comedy was hilarious (in the spirit of Deadpool). The plot makes no sense but who cares? It stars Ryan Reynolds, Samuel Jackson, Morgan Freeman, Antonio Banderas and Salma Hayek all of whom are clearly having a good time. Salma Hayek’s over-the-top performance makes the film. It even has an attack on occupational licensing. Saw it on a plane.

Worth–who would have thought that debates about estimating the value of a life would make a good movie? Michael Keaton plays Kenneth Feinberg, the lawyer who headed the September 11th Victim Compensation Fund. How much for a waiter? How much for a Wall Street trader? This is the philosophical question that gets the movie going but more practical problems also intercede. What do you do when the wife and the mistress both file for compensation? In the end, the movie bails on the big questions but succeeds on the quality of the performance by Michael Keaton. The tort system is a very expensive way to compensate victims. The Victim Compensation fund was a successful application of no-fault rules. On Netflix.

Billions–I will finish out the the fifth season but the plots are now repetitive and while I wouldn’t say it has jumped the shark it will never rise again to the heights of The Third Ortolan. I did appreciate the Neil Peart reference but it should never have been explained. Love Jason Isbell but it feels like the writers are reaching for relevance. On Showtime.

Only Murders in the Building–An old-time murder mystery starring Steve Martin, Martin Short, and Selena Gomez. It’s fun but will they pull off a satisfying ending? I hope so. A show I can watch with my wife. On Hulu.

The Biden Executive Order on promoting competition

by Tyler Cowen July 10, 2021 at 1:29 am in

Here is the text, I won’t attempt a summary but here are some running comments:

1. The beginning of the piece suggests that concentration is rising in the American economy. But this probably isn’t true. See also these comments by me.

2. Industry concentration has not driven wages down by “as much as 17%” — that’s a porky! OK, they say “advertised wages,” but come on…

3. I am happy to see the document take on occupational licensing.

4. Contra to the recommendation, we should not ban non-compete agreements outright. Many non-compete agreements are perfectly normal institutions designed to protect corporate assets against IP theft, client lists for instance. We should restrict non-compete agreements in some more sophisticated manner, still to be determined.

5. Lower prescription drug prices? Maybe. Do they estimate the elasticity of supply? No. Thus this discussion would fail my Econ 101 class. We do know, however, that prescription drugs are one of the very cheapest ways our health care system saves lives, so this is not obviously a good idea.

6. Right to repair laws? Again, maybe. But show me the trade-off and cite a cost-benefit analysis. If software gives more consumer surplus to consumers (again, a maybe), should we be wanting to tax it with contractual restrictions? Should we be wanting to tax Tesla right now?

7. Portability of bank account information is a good idea.

8. “Empower family farmers…” — do you even need to know what comes next? Aarghh!!!

9. The order “encourages” the DOJ and FTC to take various actions. I won’t blame Biden for this, but we’ve way overstepped what executive orders should be doing, some time ago. The net feeling the honest reader of this section receives is that our antitrust policies toward the large tech companies are not based in much of a notion of rule of law.

10. Should HHS “standardize plan options” in the NHIM to make price shopping easier? Makes me nervous — diverse market offerings can be good.

11. Lots of tired and not typically true claims and insinuations about concentration in airline markets; see my book Big Business or read Gary Leff. And shouldn’t airlines charge for bags? Maybe yes, maybe no, but prices per item are not in general a bad thing.

12. We are warned that farmers and ranchers take in an ever-smaller share of the food dollar spent — thank goodness! And there are a bunch of other selective, scattered observations about food prices (“corn seed prices have gone up as much as 30% annually…”), but nothing close to systematic or showing an actual market failure (corn prices by the way have been plummeting since 2012).

13. Broadband policy should indeed be improved, but this section reads as messy, should do more to emphasize the notion of competition and common carrier platforms, and how about a mention of StarLink?

14. There’s not really any point in marching through a discussion of the “Big Tech” section.

15. Is there a problem with bank concentration in this country? Not where I live. Maybe in some rural areas?

16. YIMBY > NIMBY would do more to limit market power than just about anything else, by the way.

17. Is there even a peep about this country’s biggest and worst-performing monopoly in K-12? Of course not. It is Amazon you have to worry about!

So overall this is not great economics. It is good to see the Biden administration pick up on a few pro-competition issues, but much of the document is not clearly pro-competition either. The reasoning and evidence are pretty much politicized from start to finish.

What should we regulate more?

by Tyler Cowen May 3, 2021 at 12:38 am in

Since the Biden team does not seem too favorably disposed to deregulation, perhaps it is worth asking in which areas we should be pushing for additional regulation. Here are a few possible picks, leaving pandemic-related issues aside, noting that I am throwing these ideas out and in each case it will depend greatly on the details:

1. Air pollution. No need to go through this whole topic again, carbon and otherwise. Remember the “weird early libertarian days” when all air pollution was considered an act of intolerable aggression?

2. Noise pollution. There is good evidence of cognitive effects here, but what exactly are we supposed to do? Can’t opt for NIMBY now can we!?

3. Something around chemicals? How about more studies at least?

4. Housing production. You can look at this as more or less regulation depending on your point of view. But perhaps cities of a certain size should be required by the state government to maintain sufficient affordability.

5. Mandates for standardized reporting of data? For example, the NIH requires that scientists report various genomic data in standardized ways, and this is a huge positive for science. What else might work in this regard?

6. Federal occupational licensing, in lieu of state and local.

7. Software as a service from China?

8. Animal welfare and meat production.

9. Is there a useful way to regulate to move toward less antibiotic use?

10. Should we have more regulation of AI that measures human emotions? How about facial and gait surveillance in public spaces?

11. How about regulating regulation itself?

What else?

I thank an MR reader for some useful suggestions behind this post.

Monday assorted links

by Tyler Cowen July 20, 2020 at 11:50 am

1. Sally Rooney on the culture of college debate.

2. Why did Chinese rulers stay in power for so long? And China’s floods are getting worse.

3. Russian elite given experimental Covid vaccine since April?

4. “There is little relationship between the opioid crisis and contemporaneous measures of labor market opportunity.”

5. “We show that occupational licensing has significant negative effects on labor market fluidity defined as cross-occupation mobility.”

Labor market restructuring and its possible permanence

by Tyler Cowen May 7, 2020 at 2:03 am in

Economics

We find 3 new hires for every 10 layoffs caused by the shock and estimate that 42 percent of recent layoffs will result in permanent job loss.

That is from a new paper by Jose Maria Barrero, Nick Bloom, and Steven J. Davis, top experts on this and related topics. As for policy:

Unemployment benefit levels that exceed worker earnings, policies that subsidize employee retention, occupational licensing restrictions, and regulatory barriers to business formation will impede reallocation responses to the COVID-19 shock.

Saturday assorted links

by Tyler Cowen March 28, 2020 at 12:14 pm

1. Economist Hans Stoll has passed away.

2. Who are the workers most needing support and how can we get cash to them?

4. Why did U.S. testing get so held up? (quite good)

5. Covid-19 forecasting site from The Future of Humanity Institute, Oxford.

6. How slim are restaurant margins?

7. Mercatus “Way Forward” suggestions.

8. On why the German death rate is lower.

9. New Haven asks for coronavirus housing help, Yale says no.

10. Are Italian deaths being undercounted? And it seems Spanish deaths are being undercounted (in Spanish).

11. Japan now admits the situation there is much worse than had been recognized.

12. The self-isolation culture that is royal Thai.

13. Boom times for boredom.

14. “History will not absolve Bolsonaro.”

15. Rhode Island police go after New Yorkers seeking refuge (Bloomberg).

Safety Protocols and Zones of Quarantine

by Alex Tabarrok March 26, 2020 at 7:25 am in

Carl Danner writes me:

“Essential activities” has no objective definition. It implies some blanket degree of risk acceptance that can’t be accurate by any underlying calculus, i.e. as if someone has specifically weighed whether we can tolerate these particular activities because they provide enough value to offset the incremental risk of conducting them. But the reality is more likely that those conducting most activities (including “essential” ones) are now undertaking risk mitigation measures intended to reduce the chance of virus transmission to very low or nonexistent levels.

What we need instead — and the logical place for governments to go in unwinding these blanket restrictions — is a recognition that any beneficial economic activity should be allowed if undertaken using a protection protocol appropriate to its particulars and sufficient to prevent virus transmission. This would get government out of the business of choosing which businesses or occupations are essential, vital, important or whatever — including all the problems attendant to making such discretionary determinations across the entire economy for a sustained period. Without that revised approach, we could start to develop occupational licensing/certificate of need type problems as a general feature of the economy.

In other words, this part of the virus response should transition to a health and safety regulatory concern that is important, but handled like most of the others. For example, poor food hygiene can also kill you, but governments generally don’t respond by deciding which cuisines are essential and which are not. Rather, anyone willing to follow the safety rules can put up any menu they want. So it should be for economic activities of all kinds.

We should not lift restrictions until the number of new cases is declining and low and we have enough testing capacity to squash new outbreaks. But we should start to think about what safety protocols may be reasonable in the future. For example, I think we could allow any firm to reopen that does not deal with the public and where all the employees wear masks. Any workplace that disinfects twice a day and checks worker temperatures might be another appropriate allowance. Another possibility is quarantining at work. I don’t see the latter as useful for most workplaces but for say a nuclear energy plant or air traffic controllers it might be appropriate to bring in mobile homes, as they do for fracking workers in North Dakota. Going somewhat farther afield we might use cellphone data to decide on zones of quarantine, e.g. home or work or driving in between. Obviously such systems can be spoofed but the point would be to offer this as a temporary and voluntary system to move towards normalcy.

Hat tip: Michael Higgins.

Monday assorted links

by Tyler Cowen October 21, 2019 at 12:28 pm

1. Drone deliveries start in Virginia town.

2. “All the US politicians and pundits and social media virtue signalers who are quick to windbag opine on Hong Kong protests are quiet on Chile and Barcelona this week where brutal rioters are destroying their cities and police are aggressively cracking down.” That is from Sameer Chisty. Not exactly how I would frame it, but a perspective worth hearing.

3. Sweet beverage taxes had no impact in three of the four major American cities studied.

4. Particulate matter has been rising in the U.S. since 2016 and that is bad.

5. New Kleiner and Soltas results on occupational licensing. As a side note, if you think quantity restrictions on labor entry are so bad, are you also committed to thinking the dual of price restrictions — minimum wages — must fail too? If not, what is the exact difference between those two cases?

New issue of Econ Journal Watch

by Tyler Cowen October 2, 2018 at 10:49 am in

In this issue

And the IMF said: LET THERE BE DATA. And there was data: Ryan Murphy and Colin O’Reilly unearth assumptions behind the International Monetary Fund’s numbers for private capital stocks by country.

Hayek’s Divorce and Move to Chicago: Lanny Ebenstein draws together new information to reinterpret Hayek’s personal life and how it related to his move to the United States, especially from 1945 to 1955.

The Russian pupils of Adam Smith: An essay from 1937 tells of the two Glasgow students of the 1760s who returned home and launched a tradition of Smithian liberal thought in Russia.

Ideological Profiles of the Economics Laureates: We resume the project with two of the 2013 laureates—Eugene Fama, who responded to our questionnaire, and Lars Peter Hansen.

An Icelandic saga: Hannes Gissurarson responds to his compatriot Stefán Ólafsson on the proper way to tell their country’s story since 1991.

Against the Incorporation of Barbers: A remarkable, forgotten pamphlet of 1758 argues that the restriction, which today would be termed occupational licensing, left those in need of a haircut at the mercy of “a greasy Barber, covered all over with Suds, and the excrementitious Parts of the Beards of nasty Mechanicks.”

EJW Audio:

Lanny Ebenstein on Hayek’s Personal Affairs

Dwight Lee on Teaching Econ and the Two Moralities