Real estate agent dynamism and licensing entry barriers

Abstract

Purpose The purpose of this paper is to examine the labor market entry of real estate agents in the USA and the potential effect of occupational licensing on entry. Design/methodology/approach Data from the 2012 to 2017 American Community Survey are linked to local housing price fluctuations from the Federal Housing Finance Agency for 100 large metro areas. The cost of entry associated with occupational licensing for new real estate agents is carefully measured for each market and interacted with housing fluctuations to investigate the role for barriers to entry. Findings A 10 percent increase in housing prices is associated with a 4 percent increase in the number of agents. However, increased license stringency reduces the labor market response by 30 percent. The impact of licensing is stronger for women and younger workers. Originality/value This work contributes to the growing literature investigating the impact of occupational licensing on labor supply and entry in the USA, as well as potential impacts of regulation on dynamism and entrepreneurship. To the authors’ knowledge, this study is also the first to quantify the cost of occupational licensing in the real estate industry.

The occupational life cycle of real estate brokers: a cohort study

“…For example, engineers where 29-39% leave the occupation within three years, nurses where 2% leave the occupation within five years and engineers where 60% of engineers have left the occupation after ten years (Frehill, 2010;Rudman et al, 2010). One explanation for the differences between occupations and occupational turnover might be a mismatch between the individual's perception of PJF and the reality (Ingram and Yelowitz, 2019;Larsen and Coleman, 2003;Laschinger et al, 2016). As there is no consensus within sales regarding annual turnover or the life cycle, comparison becomes delicate.…”

“…Second, the level of education influences long-term persistence and the possibility to apply for other jobs (Crellin et al, 1988;Larsen and Coleman, 2003). Third, higher educational demands will arguably not lead to increased customer protections (Barker, 2008), especially as Swedish brokers are already highly educated (Ingram and Yelowitz, 2019). On the other hand, it is doubtful if more education will have a strong impact on positive outcomes of PJF (i.e.…”

“…, 2010). One explanation for the differences between occupations and occupational turnover might be a mismatch between the individual's perception of PJF and the reality (Ingram and Yelowitz, 2019; Larsen and Coleman, 2003; Laschinger et al. , 2016).…”

“…The portrayal of successful real estate brokers in media leads to misconceptions about the industry. An inflated positive picture of brokerage reduces the student's critical stance towards their PJF, which might be one reason for leaving the industry early after registration (Ingram and Yelowitz, 2019; Webb and Seiler, 2001). The brokerage industry should benefit of being more transparent about what persistent brokerage consist of and for whom it might fit.…”

“…Another antecedent of occupational turnover among new brokers is having wrong occupational perceptions (e.g. income and working hours) in combination with lack of knowledge about one's own ability (Ingram and Yelowitz, 2019; Webb and Seiler, 2001). However, almost all of these studies lack longitudinal data, and therefore also a thorough analysis concerning the life cycle of brokers.…”