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Labor market effects of spatial licensing requirements: evidence from CPA mobility

Cascino, Stefano ORCID: 0000-0002-6703-741X, Tamayo, Ane and Vetter, Felix (2020) Labor market effects of spatial licensing requirements: evidence from CPA mobility. Journal of Accounting Research. 0 - 0. ISSN 0021-8456

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Identification Number: 10.1111/1475-679X.12342

Abstract

We exploit the staggered introduction of CPA Mobility provisions in the United States to study the effects of spatial licensing requirements on the labor market for accounting professionals. Specifically, we examine whether the removal of licensing-induced geographic barriers affects CPA wages and employment levels, as well as the pricing and quality of professional services. We find that, subsequent to the adoption of CPA Mobility provisions, wages of accounting professionals decrease, whereas employment levels are unaffected. The documented wage effect stems from smaller CPA firms, is more pronounced for CPAs holding senior positions, and persists over time. We also find that service prices decline and that this effect is concentrated in local CPA firms. Moreover, we document that the increased wage and price pressure is not associated with deteriorating service quality. Collectively, our results suggest that the removal of occupational licensing barriers has sizable effects on labor supply and service prices. Our findings inform the current regulatory debate on occupational licensing.

Item Type: Article
Official URL: https://onlinelibrary.wiley.com/journal/1475679x
Additional Information: © 2020 University of Chicago on behalf of the Accounting Research Center
Divisions: Accounting
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
H Social Sciences > HG Finance
H Social Sciences > HD Industries. Land use. Labor
JEL classification: D - Microeconomics > D4 - Market Structure and Pricing > D45 - Rationing; Licensing
J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J20 - General
K - Law and Economics > K2 - Regulation and Business Law > K20 - General
L - Industrial Organization > L5 - Regulation and Industrial Policy > L51 - Economics of Regulation
M - Business Administration and Business Economics; Marketing; Accounting > M4 - Accounting and Auditing > M41 - Accounting
M - Business Administration and Business Economics; Marketing; Accounting > M4 - Accounting and Auditing > M42 - Auditing
Date Deposited: 22 Oct 2020 14:15
Last Modified: 20 Sep 2021 03:19
URI: http://eprints.lse.ac.uk/id/eprint/107054

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