Occupational Licensing of Social Services and Nursing Home Quality: A Regression Discontinuity Approach

Abstract

Occupational licensing has grown dramatically in recent years, with more than 25% of the US workforce having a license as of 2008, up from 5% in 1950. Has licensing improved quality or is it simply rent-seeking behavior by incumbent workers? To estimate the impact of increased licensure of social workers in skilled nursing facilities (SNFs) on service quality, the authors exploit a federal staffing provision that requires SNFs of a certain size to employ licensed social workers. Using a regression discontinuity design, the authors find that qualified social worker staffing increases by approximately 10%. However, the overall increase in social services staffing is negligible because SNFs primarily meet this requirement in the lowest cost way—substituting qualified social workers for unlicensed social services staff. The authors find no evidence that the increase in licensure improves patient care quality, patient quality of life, or quality of social services provided.

The Entrepreneurial Society

“…Today, Europe's regulated professions involve more than 50 million people or 22% of total employment (European Commission 2015a; Koumenta and Pagliero 2017). Evidence from the USA and the EU shows that such regulation has a significant impact on prices and labor mobility, while little to no evidence supports the claim that quality is higher (Kleiner 2000;Kleiner andKrueger 2010, 2013;Johnson and Kleiner 2017;Koumenta and Pagliero 2017;Bowblis and Smith 2018;Barrios 2018). It seems that such protection no longer serves its original purpose: according to the European Commission (2015a, p. 7), "many of these regulations are now disproportionate and create unnecessary regulatory obstacles to the mobility of professionals, lowering productivity" (cf.…”

Early Acceleration of COVID-19 in Areas with Larger Nursing Homes and Certificate of Need Laws

“…Under federal law, nursing homes with 121 or more beds are required to staff a licensed social worker full time. 9 certificate of need (CON) laws, another state-level policy, also indirectly impact nursing home size through placing a ceiling on the supply of nursing home beds. As shown in previous studies, CON laws result in larger nursing homes in the long run due to the substantial fixed (capital) cost of proving long-term care.…”

The Continuing Burden of Occupational Licensing in the United States

“…Research has also found licensing to be either detrimental or not significantly helpful to consumers, the very people licensing purportedly benefits and protects. Recent studies of occupations such as funeral provider, social worker, and certified public accountant have found licensing raises prices, in part through the aforementioned artificially increased wages (Pizzola and Tabarrok 2017), and produces little to no increase in quality (Bowblis and Smith 2018;Barrios 2018). Similarly, research on occupations such as midwife, cosmetologist, and teacher has shown more restrictive licensing regulations in the form of tighter scope-of-practice laws (Markowitz et al 2017), lengthier educational requirements (Simpson et al 2016), and higher minimum examination scores (Shuls 2017) do not lead to improved outcomes for consumers.…”