The Political Economy of Occupational Licensing Associations

Abstract

This article studies the internal politics of a licensing association with regard to expansion of the licensure and self-regulation. A theoretical model is presented of a professional association that has the power to restrict entry, and yet a majority of its members may prefer to allow entry, even when doing so reduces the total revenue of its members. This may happen due to a conflict of interest among professional sub-specialties. On the other hand, the model predicts no heterogeneity of interests within the association regarding self-regulation. (JEL J44)