Occupational Licensing of Social Services and Nursing Home Quality: A Regression Discontinuity Approach

Abstract

Occupational licensing has grown dramatically in recent years, with more than 25% of the US workforce having a license as of 2008, up from 5% in 1950. Has licensing improved quality or is it simply rent-seeking behavior by incumbent workers? To estimate the impact of increased licensure of social workers in skilled nursing facilities (SNFs) on service quality, the authors exploit a federal staffing provision that requires SNFs of a certain size to employ licensed social workers. Using a regression discontinuity design, the authors find that qualified social worker staffing increases by approximately 10%. However, the overall increase in social services staffing is negligible because SNFs primarily meet this requirement in the lowest cost way—substituting qualified social workers for unlicensed social services staff. The authors find no evidence that the increase in licensure improves patient care quality, patient quality of life, or quality of social services provided.