Occupational Licensing and Nursing

      Last summer I worked for an international nurse recruiting company. Although the company I worked for was very small and only consisted of 3 people, the industry is quite large and it exists mainly because of nursing shortages. This shortage is in part due to occupational licensing. Finding nurses in places like the Philippines that would like to work in the United States is not difficult, but the process a nurse must go through to legally work in the United States is a nightmare. Nurses must pass nursing and English tests, have their education verified, obtain a SSN, obtain a permit from a state board of nurses, and more. One of my responsibilities was helping nurses navigate different different state licensure boards, which was very difficult as there was little reciprocity between states and many states have only a couple employees who answer calls. For all the trouble our company went through to recruit nurses, hospitals would compensate our company with a standard payment.

The nursing industry is very interesting to look at through the lense of Stigler. The profession of nursing is high paying and stable, so the licensure in the industry is understandable. Additionally, nurses that obtain all necessary licenses benefit from the regulation. If the cost of employing an international nurse is high for hospitals, it could lead them to increase wages to attract domestic nurses to their region. The barriers to entry also negatively affect the general public, as the cost to hire nurses is reflected in the extremely high cost of healthcare in the United States. It makes sense that all these regulations were put into place as they heavily help registered nurses who make up a minority of the public, and have a very small cost to people in the majority.