Cosmetologists in many states face substantially heavier training requirements t
ID: 1200495 • Letter: C
Question
Cosmetologists in many states face substantially heavier training requirements than do Emergency Medical Technicians. In markets in which consumers cannot judge quality prior to consuming goods, the issue is whether licensing of the occupations producing the goods improves quality and economic welfare. Read WSJ article Do Barbers Really Need a License? by: Dick Carpenter and Lisa Knepper, May 11, 2012 (pdf). Also read Do barbers really need a license? By Bob Craft.
https://bbaddins.schoolcraft.edu/addins/econ202v2/docs/mod12Barbers.pdf http://cbnclean.typepad.com/blog/2012/05/do-barbers-really-need-a-license.html
In your discussion post, respond to the following questions:
1. What is the "lemons problem"? In occupations with a lemons problem, does occupational licensing improve economic welfare?
2. What evidence do the authors provide in favor of eliminating occupational licensing requirements from some professions?
Explanation / Answer
1) The occupational licensing certainly improve economic welfare. The license is given after a careful scrutiny of the purity of goods, balance in the input / output, perfectness of the quality and quantity, economies of scale, tendencies of harmful and hazardous waste, amount and quality of returns, the wages /salaries economy, the possibilities of fraud, the tendencies of hoarding and black marketing, the payment of taxes and excise duties, the fairness of dealings, payment of income tax, qualifications and expreience of the employees, etc. The persons who pass this scrutiny are only given the job or the business.
2) The authors provide their returns to scale, the purity of their goods, their experience, their fitness, their honesty, and also some privileges like being ex-servicemen, disability certificate, their certificates, timely payment of taxes, the opinion of their superiors, their competence in debates, copyright, timely performance, group discussion etc.
By,
Nishant Bhatt