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board’s members, frequently drawn from the regulated profession itself, are appointed by the governor. Estab-
lishing licensure is only part of the story, of course. The tendency in all professions is to increase constraints on
entry after licensing laws have been introduced, with existing members of the occupations protecting them-
selves with "grandfather clauses" that permit them to bypass the new entry requirements.
Many requirements found in licensing statutes and enforced by licensing boards are there by dint of custom
or some arbitrary choice, not because the public is really served by them. Requirements are rarely based on the
levels of knowledge, skill, ability, and other traits truly necessary to ensure adequate service. Apprenticeship
requirements, for example, often bear little relation to the actual amount of time needed to acquire minimum
competence. Until the courts called a halt to it, for example, it took longer in Illinois for an apprentice to be-
come a master plumber than for a newly graduated physician to become a Fellow of the American College of
Surgeons.
States also impose citizenship requirements on aspiring professionals. Defenders of such requirements ar-
gue that for certain professions, especially law, the practice of the profession is so closely associated with the
country's history and traditions that licensees should be citizens. Others say that a person who wants to practice
a licensed occupation and enjoy the benefits that licensure bestows ought to become a U.S. citizen within a rea-
sonable period of time.
The courts have not accepted this line of reasoning, however. The Fourteenth Amendment provides that no
state may deny equal protection of the law to any person within its jurisdiction; aliens, as well as citizens, are
protected. This logic was used in 1981, when a federal court declared unconstitutional a Louisiana law requir-
ing a person to be a U.S. citizen in order to practice dentistry. Similarly, many state laws requiring licensees to
have lived in the state for a substantial period of time have been revoked in recent court cases. In 1985, for ex-
ample, New Hampshire's residency requirement for lawyers was declared unconstitutional by the U.S. Supreme
Court. Nevertheless, many residency provisions remain on the books and will continue to be enforced until
challenged.
Although used ostensibly to help state licensing boards determine the fitness of candidates, most licensing
exams require recall of a wide range of facts that may have little or nothing to do with good practice. For exam-
ple, candidates taking California's architecture licensing exam have had to discuss the tomb of Queen Hatshep-
shut and the Temple of Apollo. The District of Columbia's cosmetology exam recently required applicants to do
finger waves and pin curls-styles that have been out of fashion for decades. Even standardized national exams,
now common in many professions, have rarely been more than superficially valid. Moreover, economists have
found evidence that examination grading standards have sometimes been manipulated to reduce the number of
applicants who pass the tests during tough economic times. In a study done for the U.S. Department of Labor,
for example, economist Elton Rayack found that for ten of the twelve licensing exams he studied, failure rates
were higher when unemployment rates were higher. My 1988 paper documents similar results for certified pub-
lic accountants, although reforms mandating nationwide grading of the certification exam effectively ended the
manipulation of failure rates.
Perhaps the most frequent criticism of licensing has been the failure of licensing boards to discipline licen-
sees. A major cause is the reluctance of professionals to turn in one of their own. The in-group solidarity com-
mon to all professions causes members to frown on revealing unsavory activities of a fellow member to the
public. Going public regarding infractions, no matter how grievous, is often viewed as disloyalty to the profes-
sional community.
Indeed, licensing agencies are usually more zealous in prosecuting unlicensed practitioners than in disci-
plining licensees. Even when action is brought against a licensee, harm done to consumers is unlikely to be the
cause. Professionals are much more vulnerable to disciplinary action when they violate rules that limit competi-
tion. A 1986 report issued by the U.S. Department of Health and Human Services claims that despite the in-
creasing rate of disciplinary actions taken by medical boards, few such actions are imposed because of malprac-
tice or incompetence.
The evidence of disciplinary actions in other professions, such as law and dentistry, is no less disturbing
than in medicine. According to Benjamin Shimberg's 1982 study, for example, as much as 16 per cent of the
California dental work performed in 1977 under insurance plans was so shoddy as to require retreatment. Yet in
that year, the dental board disciplined only eight of its licensees for acts that had caused harm to patients.
Because licensing laws restrict entry, it is not surprising that such laws affect the income of licensees. Wil-
liam D. White's 1978 study of clinical laboratory personnel found that stringent licensing laws increased the
relative wages of licensees by 16 per cent. Lawrence Shepard's 1978 study compared average fees for dental
services between states that recognize out-of-state licenses and those that do not. Controlling for other factors,
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