Re-licensing requirements for professionals that move across borders are
widespread. In this paper, we measure the effects of occupational licensing by
exploiting an immigrant physician re-training assignment rule. Instrumental
variables and quantile treatment effects estimates indicate large returns to acquiring
an occupational license and negative selection into licensing status. We
also develop a general model of optimal license acquisition which, together with
the empirical results, suggests that stricter re-licensing requirements may not
only lead to practitioner rents but also to lower average quality of service in
the market for physicians. |