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Occupational Regulation in the States: A Causal Model

Edward W. Crowe
University of North Carolina

Roger Feldman
University of Minnesota

Occupational regulation in the United States is mainly carried out by state licensing boards whose regulatory actions frequently are described as "anticompetitive." Despite the social, political, and economic importance of these board policies, little empirical research has been conducted on the process by which regulations are developed by occupational associations and state legislatures.

This issue is addressed through analysis of data on state regulation of optometry. The regulatory power of optometry in each state is explained by characteristics of interest groups, the political system, and the socioeconomic setting. Independent variables in the analysis include the urbanization and per capita income of each state, interparty competition, legislative turnover, and innovativeness in policymaking. In addition, three measures of occupational interest group strength are employed: the percent of optometrists belonging to their state occupational associations, the ratio of optometrists to ophthalmologists and opticians, and whether or not the state optometric association employed a legislative lobbyist. The dependent variable, degree of regulation of optometry, is an index composed of four practice standard regulations which govern price advertising, branch offices, commercial practice, and continuing education.

The independent variables explain about one-third of the variance in regulatory policy across states. We find that relative interest group strength enhances optometry's ability to achieve regulation, while interparty competition and state policy innovativeness are inversely related to the level of that profession's control.

The causal analysis of state regulatory policy supports the argument that regulation is actively sought by professionalizing occupations. These groups enter the political arena to secure their regulatory objectives, and their success in obtaining these goals depends on organizational resources and the political environment in the states. The findings help to explain why state regulatory policies often appear to benefit the regulated occupations.

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