A recently published opinion piece warns readers about the dangers of reining in self-serving licensing boards in Nevada. The truth is that this reform is badly needed in the state.
Indeed, in the Supreme Court case NC Dental vs FTC from 10 years ago, it was determined that licensing boards require more independent oversight. If states fail to provide this oversight, they may be exposing themselves to antitrust legislation. SB78 takes a good first step toward providing this oversight.
Why do licensing boards need this oversight? Although licensing boards purportedly serve the public interest, they also have incentive to serve their own private interests as well.
The 150-hour rule for certified public accountants (CPA) is a case in point. Without providing any quality evidence that accountants needed to complete 150 hours of education and training before taking the CPA exam, accountant licensing boards across the country adopted a silly rule that aspiring accountants needed 30 hours of education beyond a typical bachelor’s degree. Nevada was no different.
Research shows that this dramatically reduced the number of CPA candidates. You don’t have to be an expert in economics to understand what this means in the market for CPAs. Just like anything else, if supply goes down, price goes up. CPAs enjoyed the benefits of this artificial cap on the number of CPAs in the form of higher salaries. And the public received no benefit whatsoever from this rule.
The self-serving 150-hour rule is a case in point as to why accounting boards, and all licensing boards for that matter, need good independent oversight. It prevents licensing boards from establishing rules that are self-serving rather than in the public’s best interest.
And Nevada is a state that needs this additional oversight. In a recent national review of occupational licensing standards across the country that I co-authored, I found that Nevada licenses 179 occupations of the 284 that we study. Kansas licenses just 136 and there is no evidence whatsoever that Kansas residents are harmed by this substantial difference in licensed professions.
Continue reading at The Nevada Independent.
Edward Timmons, PhD, is a senior fellow at the Archbridge Institute and a service associate professor of economics and director of the Knee Regulatory Research Center at the John Chambers School of Business and Economics at West Virginia University. He is regularly asked to provide expert testimony in state legislatures across the US on occupational licensing reform and the practice authority of nurse practitioners. His work is heavily cited by the popular press, and he has authored numerous articles for media publications.
Economics of Flourishing
A recently published opinion piece warns readers about the dangers of reining in self-serving licensing boards in Nevada. The truth is that this reform is badly needed in the state.
Indeed, in the Supreme Court case NC Dental vs FTC from 10 years ago, it was determined that licensing boards require more independent oversight. If states fail to provide this oversight, they may be exposing themselves to antitrust legislation. SB78 takes a good first step toward providing this oversight.
Why do licensing boards need this oversight? Although licensing boards purportedly serve the public interest, they also have incentive to serve their own private interests as well.
The 150-hour rule for certified public accountants (CPA) is a case in point. Without providing any quality evidence that accountants needed to complete 150 hours of education and training before taking the CPA exam, accountant licensing boards across the country adopted a silly rule that aspiring accountants needed 30 hours of education beyond a typical bachelor’s degree. Nevada was no different.
Research shows that this dramatically reduced the number of CPA candidates. You don’t have to be an expert in economics to understand what this means in the market for CPAs. Just like anything else, if supply goes down, price goes up. CPAs enjoyed the benefits of this artificial cap on the number of CPAs in the form of higher salaries. And the public received no benefit whatsoever from this rule.
The self-serving 150-hour rule is a case in point as to why accounting boards, and all licensing boards for that matter, need good independent oversight. It prevents licensing boards from establishing rules that are self-serving rather than in the public’s best interest.
And Nevada is a state that needs this additional oversight. In a recent national review of occupational licensing standards across the country that I co-authored, I found that Nevada licenses 179 occupations of the 284 that we study. Kansas licenses just 136 and there is no evidence whatsoever that Kansas residents are harmed by this substantial difference in licensed professions.
Continue reading at The Nevada Independent.
Edward Timmons
Edward Timmons, PhD, is a senior fellow at the Archbridge Institute and a service associate professor of economics and director of the Knee Regulatory Research Center at the John Chambers School of Business and Economics at West Virginia University. He is regularly asked to provide expert testimony in state legislatures across the US on occupational licensing reform and the practice authority of nurse practitioners. His work is heavily cited by the popular press, and he has authored numerous articles for media publications.
Share:
Related Posts
Bring business back to Illinois — and Illinoisans back home
Hope for Some Sanity on Licensing Reform
Why Classical Liberals Should Be Skeptical Of DOGE