New Books in Economics

Rebecca Haw Allensworth, "The Licensing Racket: How We Decide Who Is Allowed to Work, and Why It Goes Wrong" (Harvard UP, 2025)

5 snips
Feb 12, 2025
Rebecca Haw Allensworth, a Professor of Law at Vanderbilt University and expert on professional licensing, dives into the intricacies of labor regulation. She discusses how professional licensing can create significant economic barriers, often driven by conflicts of interest on licensing boards. The conversation critiques the balance between protecting public safety and hindering access to professions. Allensworth also touches on the failures of these boards, the impact on healthcare access, and the need for systemic reforms to improve accountability and consumer protection.
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INSIGHT

Licensing's Unreliable Trade-off

  • Licensing aims for safety and quality by increasing costs and difficulty.
  • This trade-off doesn't always work, varying greatly by profession.
INSIGHT

The Licensing Bargain

  • Professions promise safe, competent providers for autonomy in self-regulation.
  • Licensing boards, with state power, decide who can practice and enforce disciplinary action.
INSIGHT

The Licensing Ratchet

  • Licensing requirements tend to increase over time, benefiting professionals but potentially harming consumers through reduced competition and increased costs.
  • This "ratchet" effect is exemplified by excessive classroom hours for barbers and alcohol/drug abuse counselors.
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