Busting labour monopolies. Case study: Occupational Licensing

"Occupational licensing is costly for both consumers and aspiring workers, but results in measurable benefits for existing market practitioners. Occupational licensing persists even though its costs very likely outweigh its benefits.
    "Occupational licensing makes it illegal for an individual to work in a profession before meeting minimum entry requirements set by the government. ... The minimum entry requirements often include paying fees, meeting minimum levels of education and training, passing exams, and meeting other requirements such as having a minimum age or possessing 'good moral character.'
    "Several dozen occupations, such as physicians, dentists, barbers, and cosmetologists, are licensed [along with] florists, interior designers, and ocularists. ... Many professions such as massage therapists, funeral directors, and athletic trainers, are licensed ...
    "Active market providers make up the largest percentage of licensing board membership. Many licensing board members own or have financial ties to schools that directly benefit ... Applicants for licenses are also future competitors of existing practitioners. Licensing board members can financially benefit from limiting entry into the profession by imposing expensive requirements. Consequently, licensing board members do not typically separate the public interest function of licensing boards from their own private interests. ...
    "The commonly stated objective of occupational licensing is to limit harm to consumers from poor quality service. ... But licensing has very clear negative effects. ...
    "Research confirms that licensing raises the prices of licensed services by anywhere from 3 to 13%. ... Studies estimating the effects of licensing in the 21st century often find little evidence of benefits for consumers. ...
    "[E]stimating the average effects of licensing on quality may not fully capture losses in access to service from reductions in the number of professionals. This has come to be known as the 'Cadillac effect' ... [L]icensing limits consumers to either purchasing services from providers meeting standards set by licensing boards (Cadillacs), or not purchasing services at all. This may encourage consumers to seek services in the underground economy, or to encourage consumers to do the services themselves. ...
    "[L]icensing boards [also] force consumers to purchase services meeting a standard that is not in the consumer’s best interest. ... [O]ccupational licensing reduces labor supply by as much as 29%. Occupational licensing restrictions can also limit the number of immigrants working in a licensed profession. ...
    "[T]here is very little evidence that licensing helps consumers. What is clearer is that licensing does indeed benefit existing practitioners."

~ Edward J. Timmons, from his post 'Occupational Licensing'