Tuesday, January 23, 2018

Entry Barriers for Opticians

A new paper by Timmons and Mills,"Bringing the Effects of Occupational Licensing into Focus: Optician Licensing in the United States," examines the effects of labor market entry barriers. The argument for occupational licensing is that it can serve to assure the quality of practitioners. The argument against is that it restricts supply and drives up prices. Timmons and Mills find no evidence of the former but:
Our results suggest that optician licensing is associated with opticians receiving as much as 16.9 percent more in annual earnings. 

I don't think I have yet seen an example in which occupational licensing was found to improve quality and/or does not raise costs. This is why most economists who study the matter prefer to allow market mechanisms (e.g., warranties, reputation, third party reviews) assure quality rather than government regulation.

2 comments:

  1. This comment has been removed by the author.

    ReplyDelete
  2. Entry barriers are a bit of a concern, as these seem to be more financial than about competences or brand. It would be easy to come up with an equally if not sexier brand than Vision Express or Specsavers, especially with the vulnerabilities that I have identified in terms of customer service, pricing and sales process. A new upstart could do some real damage to the existing players, especially if it had a new business model that was difficult for others to imitate. Read my open topic about this theme at my page.

    ReplyDelete