The Labor Market Consequences of Regulating Similar Occupations: the Licensing of Occupational and Physical Therapists

Abstract

This study examines the influence of occupational licensing on two significant occupations that provide similar health care services: occupational therapists and physical therapists. Since many of the tasks that these occupations overlap, individuals in both occupations can have legal jurisdiction over these tasks. We examine how these two occupations interact with one another in the labor market on wage determination and employment. Unlike previous analyses of occupational licensing, our study evaluates two professions that are female dominated both within the vocations, and among its leadership. Our results show that the ability of physical therapists to have direct access to patients is associated with a reduction in hourly earnings for occupational therapists, suggesting there is substitution for certain overlapping service tasks across the two occupations. The ability of these two occupations to be mainly substitutes for one another provides new evidence on how the growing numbers of regulated occupations that provide similar tasks influence one another.