Economic case studies on the effects of regulatory requirement reforms to access professions

The European Commission contracted independent academic studies on the economic effects of regulatory requirement reforms to access professions in Germany, Greece, Italy and the UK, to support the mutual evaluation process and underpin follow-up actions on regulated professions presented in the Single Market Strategy with empirical evidence.

The results of these studies tend to demonstrate that reforms led to further opening of the market. The precise effects of liberalisation differ depending on the countries and the professions targeted by the reforms, but no or few indications of negative impact have been found.

Importantly, the studies do not put in question any particular education system (dual or unitary) or the required quality level of service provision. 

These studies are based on sound methodology and datasets and have been carried out by top academic experts in the field. While they constitute an important element in better understanding the economic effects of reforms, they do not express any Commission position regarding liberalisation of regulatory requirements.

Results

In Germany, the number of new entrants into a number of craft professions, for which requirements based on qualifications were made less stringent in 2004, doubled between 2002 and 2008. Five years after the reform there were still more start-ups than companies going out of business. One of the consequences of reducing the qualification requirement for setting up a business is that fewer of the self-employed hold a degree. This study shows that training activities have not been significantly reduced due to the reform. It also shows that the number of people who start an apprenticeship had already declined in both groups of occupations (deregulated and not deregulated) before the reform. The reasons for the decline in the number of apprentices in craftsmanship may be particularly linked to an increasing number of people choosing to study at university.

Regulatory Effects of the Amendment to the HwO in 2004 in German Craftsmanship, Davud Rostam-Afschar, Free University Berlin and German Institute for Economic Research (DIW Berlin), 2015

In Greece reforms resulted in lower prices for consumers of the services of real estate agents, legal professions, accountants, tax consultants and physiotherapists which were liberalised by the reform enacted in 2011. The number of start-ups for notaries, auditors, tourist guides and chartered valuers more than doubled in 2014 compared with the yearly average before the liberalisation.

The effects of liberalisation of professional requirements in Greece, E. Athanassiou, N. Kanellopoulos, R. Karagiannis, A. Kotsi, Centre for Planning and Economic Research (KEPE), Athens, 2015

In Italy, the Bersani reform of 2006 brought new entrants into the market for over-the-counter drugs, increasing demand for pharmacists, leading to higher earnings of young pharmacists and their higher overall employment. Evidence shows that the reform had little or no impact on the market for lawyers, arguably due to the lack of sufficient implementation of the new provisions into the codes of ethics and deontology of each of the affected professions.

The effects of recent reforms liberalising regulated professions in Italy, Mario Pagliero, University of Turin & Carlo Alberto College, 2015

In the UK, the study explores the impact of the introduction of licensing for nursery school workers and for security guards. For the former, it had a negative effect on employment and wages but a positive effect on skill levels. For security workers, wages went up but there was no effect on employment or skills. In both occupations a positive impact on quality was observed. For security guards increased quality was achieved through requiring a clean criminal record. The authors suggest than that depending on the profession, a high level of quality can be ensured by regulation of other aspects than qualifications.

The Effects of Occupational Licensing on Employment, Skills and Quality: A Case Study of Two Occupations in the UK, Maria Koumenta, Amy Humphris, Queen Mary University of London, 2015