Occupational Licensure and Entrepreneurs

The Case of Tax Preparers in the United States

Bibliographic Data

ID3435231
AuthorsKyle Albert (0000-0002-0029-0189), Kyle W Albert, Roman V Galperin (0000-0001-7742-5865, Johns Hopkins University, corresponding author), Aleksandra Kacperczyk (0000-0001-7874-6177, Kyle W. Albert is an Assistant Research Professor at George Washington University. Roman V. Galperin is an Assistant Professor at Johns Hopkins Carey Business School. Aleksandra Kacperczyk is an Associate Professor at London Business School)
Year2019
Volume72
Issue5
Pages1065-1093
Publication date2019-10-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueIndustrial and Labor Relations Review (JOURNAL)
Journal identifiersISSN: 0019-7939 • E-ISSN: 2162-271X
PublisherSAGE Publications Inc (PUBLISHER)
DOI10.1177/0019793919847647
OpenAlexW2898038267
LanguageEN
References cited40

The authors examine the relationship between entrepreneurship and occupational licensure using data on the universe of more than 700,000 tax preparers in the United States. Prior research suggests that occupational licensure has negative effects on entrepreneurship because it increases the costs of operating a business. By contrast, the authors argue that licensure may allow entrepreneurs to signal quality and enhance their legitimacy. States that require tax preparers to be licensed have higher average rates of entrepreneurship-approximated by tax practice ownership-and, in high-income ZIP codes, more demand for paid preparer services. In the analysis of the introduction of a federal license requirement in tax preparation in 2013, voluntary early adoption of the license by preparers predicts higher chances of survival in the industry. Entrepreneurs are less likely to adopt the license early than are non-entrepreneurs, unless they lack other state-level credentials. Results thus suggest that licensure represents a trade-off for entrepreneurs between the costs of obtaining a license and the benefits of signaling quality and legitimacy

Business · Demographic economics · Economics · Entrepreneurship · Labour economics · Legitimacy · License · Licensure · Political science · Public economics · Quality (philosophy) · Finance · Healthcare Quality and Management · Law · Management and Organizational Studies · Marketing · Occupational and Professional Licensing Regulation

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