Certificate of Need and the labor market

Abstract

Thirty‐five U.S. states currently have Certificate‐of‐Need (CON) laws, which require health care providers to prove their “economic necessity” to a state board before they can legally open or expand. While dozens of articles have evaluated the effect of CON on hospitals and consumers, no published article has evaluated its effect on health care workers. We argue that the sign of the effect of CON on both the wages and employment is theoretically ambiguous. We conduct an empirical analysis of CON laws using 1979–2019 data from the Current Population Survey. We find that CON does not significantly affect the employment or wages of health care workers.