Matt Yglesias notes that, compared to states where dental hygienists are required to work in a dentist’s office, dental hygienists earn about 10% more in states where they’re allowed to work independently. Likewise, dentists in those states earn less and have slower employment growth. The obvious conclusion is that in states where hygienists are required to work for dentists, dentists capture some of their earnings:
There’s been a lot of interest over the past ten years among progressives in the subject of the political origins of growing income inequality. But I find there’s been less interest in trying to explore specifically what those origins might be. It’s not all overregulation of dental hygenists (obviously) but it’s also not all Bush tax cuts and Commodity Futures Modernization Act either.
This is interesting stuff, but it lacks one thing: a time function. Occupational licensing like this might transfer income upward in some cases (though the hygienist example is sort of unique in the way it works), but it would only contribute to growing income inequality if this particular type of hygienist regulation has increased over the years. Unfortunately, the paper Matt cites would cost me $5 to read, so I’ll probably never know if it has.
UPDATE: Now I’ve read it! All your questions are answered here.
