OCCUPATIONAL LICENSING: THE MERRISON REPORT ON THE REGULATION OF THE MEDICAL PROFESSION–A COMMENT

DOIhttp://doi.org/10.1111/j.1467-8543.1978.tb00270.x
Publication Date01 Mar 1978
AuthorS. R. Engleman
OCCUPATIONAL LICENSING: THE MERRISON REPORT ON
A
COMMENT
S.
R.
ENCLEMAN”
THE REGULATION
OF
THE
MEDICAL
PROFESSION-
As
W.
S.
Siebert points out
in
his recent article in this Journal,’ there has been a lack of
public discussion of the economic impact of licensing rules which restrict entry into the
medical profession. Unfortunately some serious flaws in Siebert’s treatment
of
this
subject suggest that the validity of his conclusions regarding the economic power of the
medical profession have yet to be adequately demonstrated.
Much
of
Siebert’s argument concerning the medical labour market is based on the
implications that can be drawn from a theoretical framework of a monopoly supplier of
labour facing a competitive market
for
the services
of
its members (as in the example
given
of
the Illinois barbers) which chooses to restrict the supply of labour. Siebert
correctly observes that a reduction in labour supply will necessarily improve the
economic position of the monopoly union. The market structure
of
the
U.K.
medical
labour market does not, however, conform to this description. The
N.H.S.
can more
realistically be seen as a monopsonistic buyer, making the appropriate analytical
framework that
of
bilateral monopoly.
As
the outcome of bilateral monopoly
is
inde-
terminate (depending on the relative bargaining power
of
the respective parties), the
conclusions drawn by Siebert as to the benefits to be gained through the exercise
of
monopoly power
no
longer necessarily hold. While one may speculate as to the relative
power
of
the two sides, the outcome is by
no
means intuitively obvious.
In addition, the wage determination process in the
N.H.S.
is more complex than that
suggested by Siebert, who implied a simultaneous determination of employment and
earnings by a market mechanism. Medical earnings are in fact set by the Doctors’ and
Dentists’ Review Body, which appears to set earnings levels primarily on the basis of
‘comparability’.2 Thus with an administrative earnings determination mechanism func-
tioning as the Review Body does,
it
no longer follows that a reduction in supply
necessarily leads to an award
of
higher earnings.
*
Lecturer in Applied Economics, Department
of
Social and Economic Research, Glasgow
University.
REFERENCES
1.
W.
S.
Siebert, ‘Occupational Licensing: The Merrison Report on the Regulation
of
the Medical
2.
See
for
example,
Report
of
the Review
Body
on Doctors’
and
Dentists’ Remuneration,
Cmnd.
Profession’,
British
Journal
of
Industrial Relations,
Vol.
15,
1977.
5010,
H.M.S.O.,
1972,
p.
18.
106

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT