The labor market institution of occupational licensing continues to grow in scope in the United States and abroad. In this paper, we estimate the effects of occupational licensing on opticians using data from the US Census and American Community Survey. Our results suggest that optician licensing is associated with opticians receiving as much as 16.9 percent more in annual earnings. In an examination of malpractice insurance premiums in all states and participation rates in optician certification programs in Texas, we find little evidence that optician licensing has enhanced the quality of services delivered to consumers. By and large, optician licensing appears to be reducing consumer welfare by raising the earnings of opticians without enhancing the quality of services delivered to consumers.
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We also investigated the effects of optician licensing on the earnings of optometrists over the same time period (1940–2012) and found no evidence that optician licensing has affected the earnings of optometrists. Ophthalmologists are not identifiable in the Census or ACS — all medical doctors are included in the category of “physicians.”
Imputed hourly wages were examined through self-reported hours worked and weeks worked. Some of the data on weeks worked were gathered in intervals, so the medium of the range was used. The results do not substantially change if wages are used as opposed to annual earnings. Also, any changes in the sample (for instance, restricting the analysis to the period 1940–2000) made no material difference in the results.
Ideally we would also control for the difficulty of each exam, but data on exam difficulty from 1940 to 2012 is not available.
We also estimated the effects of optician licensing on employment population ratios in each state. We found little evidence of any effect. We believe that optician licensing requirements discourage entry into the profession, but the ACS and Census do not provide sufficient data to explore this hypothesis further.
Each regression also includes person weights (representing the number of persons represented by each observation in the sample) provided by the Minnesota Population Center’s Integrated Public Use Microdata Series (http://www.ipums.org).
The procedure described in the Appendix of License to Work was used to transform education requirements into days. In licensing statutes, education requirements are often reported as “hours” or “clock hours.” For the conversion, hours were divided by 30 (reflecting a 6-hour school day and assuming 5 days of school per week) to convert education requirements into weeks. Weeks were then converted into days by multiplying by 7. If licensing requirements are expressed as years, the number is multiplied by 365. If expressed in terms of degrees, the standard completion time of two years is assumed for an associate’s degree and then multiplied by 365.
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Timmons, E., Mills, A. Bringing the Effects of Occupational Licensing into Focus: Optician Licensing in the United States. Eastern Econ J 44, 69–83 (2018). https://doi.org/10.1057/eej.2016.4
- occupational licensing
- occupational regulation