Competition and Regulation in Professions and Occupations – OECD – June 2024 OECD discussion

This presentation by OECD, OECD Secretariat, was made during the discussion “Competition and Regulation in Professions and Occupations” held at the 77th meeting of the OECD Working Party No. 2 on Competition and Regulation on 10 June 2024. More papers and presentations on the topic can be found at oe.cd/crps.

This presentation was uploaded with the author’s consent.

1. Competition and Regulation in
Professions and Occupations
10 June 2024
Secretariat Presentation

2. Percentage of workforce subject to
professional regulation and
occupational licensing
Context
•There are high levels of variation between
countries and within countries of what is regulated
•Severalmembercountrieshavelaunchedmajor
policyreforminitiativestoassesstheissueandits
impactontheeconomy
•Thereisalsorenewedinterestfromcompetition
authoritiestobeinvolvedinpro-competitive
advocacyinitiativesacrossprofessionsand
occupations
In recent decades and across the OECD, the number of jobs subject to
professional regulation or occupational licensing has grown significantly
29%
USA
22%
EU
18%
AUS

3. Profession
A job deemed to
be of sufficient
importance to
require advanced
training, enjoy
exclusive rights,
and in some
cases to be
regulated by their
own membership
Licensed
occupation
A job which
requires individuals
who wish to
perform certain
services to obtain
permission from
the government or
a state authority
•There is no universally accepted
definition of what constitutes a
profession or a licensed
occupation
•We use the terms
interchangeably to refer to any
job subject to rules that
regulates market entry and
behaviour
Definitions of key terms

4. What does regulation include?
Market entry
•Training and
qualifications
•Compulsory
membership
of association
•Limits on
numbers
•Minimum
distance
between
providers
Exclusive
rights
•Restrictions
on who can
perform
activities and
services
•Reserved use
of titles
Behavioural
rules
•Advertising
bans or limits
•Set fees and
discounting
bans
•Proscribed
business
structure
•Liability and
insurance
obligations
Oversight
•State
oversight of
misconduct
•Self-
regulation of
misconduct
•Blended
model

5. Why regulate?
•Characterises professions and occupations
as focused on rent-seeking, lobbying and
regulatory capture
•Service providers monitor each other, erect
barriers to entry and place rules on
behaviour–undermining competition
•Compared to consumer outcomes which are
diffuse, professions and occupations are able
to lobby on narrow issues, biasing
policymakers towards their interests
•Information asymmetries as the services
provided are experience goods or credence
goods
•Risk that low quality service will create
negative externalities for third parties (e.g.
poor medical care creating risk of contagion)
•Some public goods may require the ability to
access the services of a professional (e.g.
conveyancers and the public good of well
defined and enforceable property rights)
Public interest approach Private interest approach

6. Outline
6
The empirical evidence on professions and
occupations
Competition advocacy efforts on professions and occupations
Technological innovation and new competition in the professions and occupations

7. Scan the QR code to read the background paper