Working Paper: NBER ID: w19906
Authors: Morris M. Kleiner; Allison Marier; Kyoung Won Park; Coady Wing
Abstract: Occupational licensing laws have been relaxed in a large number of U.S. states to give nurse practitioners the ability to perform more tasks without the supervision of medical doctors. We investigate how these regulations may affect wages, employment, costs, and quality of providing certain types of medical services. We find that when only physicians are allowed to prescribe controlled substances that this is associated with a reduction in nurse practitioner wages, and increases in physician wages suggesting some substitution among these occupations. Furthermore, our estimates show that prescription restrictions lead to a reduction in hours worked by nurse practitioners and are associated with increases in physician hours worked. Our analysis of insurance claims data shows that the more rigid regulations increase the price of a well-child medical exam by 3 to 16 %. However, our analysis finds no evidence that the changes in regulatory policy are reflected in outcomes such as infant mortality rates or malpractice premiums. Overall, our results suggest that these more restrictive state licensing practices are associated with changes in wages and employment patterns, and also increase the costs of routine medical care, but do not seem to influence health care quality.
Keywords: Occupational Licensing; Nurse Practitioners; Wages; Healthcare Prices; Regulations
JEL Codes: D02; D42; D47; H7; I1; I12; I18; I28; J0; J18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| NP supervision by MDs (I11) | NP wages (P44) |
| NP supervision by MDs (I11) | MD wages (J39) |
| Prescription restrictions (D45) | NP hours worked (J22) |
| Prescription restrictions (D45) | MD hours worked (J22) |
| Stricter regulations (G18) | Price of well-child medical exam (I11) |
| Stricter regulations (G18) | Healthcare quality (I11) |