I am confused on these questions. Please help. 6a) Why do you suppose that emplo
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Question
I am confused on these questions. Please help.
6a) Why do you suppose that employment growth is about 20 percent greater in unlicensed occupations than in licensed occupations?
6b) What do you suppose a typical state government does with the millions of dollars of occupational license fees it receives each year?
A Sharp Increase in Occupations Requiring State Approval Table 24-1 lists some of the occupations that require censes in at least a few states. All told, 1,100 different jobs now require a license in at least one state-a number nearly 40 percent larger than three decades ago. Indeed, more than 30 percent of U.S. residents are in occupations requiring licenses. By way of comparison, in 2000, fewer than 20 percent of U.S. residents were in licensed oc- cupations, and in 1950, only about 5 percent required licenses. Economic Effects of Occupational Barriers to Entry To obtain occupational licenses, people typically must pay fees. Many must also engage in a period of study-perhaps through or even beyond an undergraduate degree. Such licensing requirements constitute barriers to entry.Explanation / Answer
6a
In order to enter a licensed occupation, a person has to obtain the required license. Obtaining such license require payment of fees coupled with engagement in study for a described time period in many cases. Thus, to enter a licensed occupation a person has to overcome barriers in form of license fees as well as completion of prescirbed study. So, in a sense, entry into licensed occupation is not straight forward.
On the other hand, while entering unlicensed occupation a person neither have to pay a license fee nor have to complete any study. So, one can enter unlicensed occupation in rather straight forward manner.
This ease of entry into unlicensed occupations in comparison to licensed occupations results in greater number of people entering the unlicensed occupations in comparison to licensed occupations.
Higher the entry, greater will be the employment growth.
Thus, due to greater number of people entering the unlicensed occupations in comparison to licensed occupations, employment growth is about 20 percent greater in unlicensed occupations than in licensed occupations.
6b
A typical state government generally utilize the millions of dollars of occupational license fees it receives each year in funding various public projects such as building of roads, schools and other public infrastructure. This revenue also enable the government to bear the administrative cost of maintaining the license regime.
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