This matters beyond just doctors and chiropractors. Think:

Nurse practitioners vs doctors

Psychologists vs LICSWs

Any profession where substitutes have separate boards

Competitive licensing changes everything about how we evaluate regulation.

Full Paper: john-fallon-econ.com/Files/JMP.pdf
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The model estimates reveal that boards act like profit-maximizing cartels (Stackelberg equilibrium), not benevolent regulators.

This is regulatory capture in action - boards prioritize incumbent profits over public welfare.

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So why would raising YOUR barriers help when competitors enter?

I build a structural model showing boards want to engage in "cream-skimming" - they want to set standards just high enough to poach high-ability workers from rival professions.

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The tricky part: does licensing cause these changes, or do areas with more chiropractors just adopt licensing?

I use an IV strategy with non-bordering counties (F-stats 338-699) and find chiropractors actually INCREASED 2-12 per 100k despite now facing barriers.

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But there's a cost: doctors per capita fell by 17-40 per 100k people.

This is huge - it explains much of what historians attribute to the famous Flexner Report. Maybe those "quality reforms" were actually strategic responses to competitive threats.

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Here's what's striking: BOTH professions benefited economically.

Doctors saw 26% higher home values and chiropractors saw 44% higher home values.

Licensing didn't just restrict entry - it legitimized chiropractors while doctors raised their own barriers.

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I digitized AMA records from 1907-1960 and found medical boards systematically tightened requirements after states licensed chiropractors:

Required internships shot up 10-15pp
Pass rates fell 5pp
College requirements rose ~10pp

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We usually think of occupational licensing as professions policing themselves. But what happens when competing professions each have their own licensing boards?

Turns out they weaponize regulations against each other.

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I'm John Fallon, a labor economist on the job market. My JMP uncovers something wild: when chiropractors got licensed in the early 1900s, medical boards responded by making it HARDER to become a doctor.

Why would competition lead to stricter regulations?
🧵

john-fallon-econ.com

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The resulting change in teacher composition had surprisingly persistent effects! @wheelockpolicybu.bsky.social

Just saw a great paper by @michaelbriskin.bsky.social ! He shows that WWII led to a massive teacher shortage that led to lower wages and lower educational attainment for affected students #AEFP2025 #Econsky