It’s been said that “once you reach the top of the ladder of opportunity, the first thing to do is pull up the ladder behind you.” Let’s consider the implications of this adage for labor market outcomes.
a. When doctors, schoolteachers, and beauticians encourage the government to make it more difficult for people to enter their industries, does this tend to lower or raise the supply of these professionals?
b. If government requires higher educational and training standards for doctors, schoolteachers, and beauticians, does this tend to raise or lower the demand for the services of these professionals?
c. In equilibrium, taking into account your answers to parts a and b, what is the total effect of this lobbying on the wages of these professionals: Do wages rise, fall, or is the total effect ambiguous? Does the total number of people employed in these professions rise, fall, or is the total effect ambiguous?