The great British economist John Maynard Keynes said he longed for the day when economics could be thought of as a “matter for specialists - like dentistry”.
It’s easier to become an economist than a dentist, or a doctor or a lawyer. For those and other professions you need to be accredited - you need a licence to practice.
The economics profession requires nothing other than a university degree, and this month in its regular poll of 54 leading economists, the Economic Society of Australia asked whether it should set the bar higher.
The first question asked whether:
"…professional accreditation for the economics profession would attract more people to economics as a career."This was rather timely, since this week in my ECONS101 class we were discussing market power. One source of market power occurs when the government gives you an exclusive right to operate. Occupational licensing is an example of this. It makes sense to licence some occupations, like doctors, dentists, or nurses, where the government wants to ensure certain safety standards are met. Other occupations are licensed because the government wants to ensure trust in the profession, like real estate agents or financial advisors. On one (or both) of those two grounds, you could (and many do) argue in favour of continued licensing of teachers, and taxi drivers. However, it's a little harder to argue in favour of some other licensed occupations in overseas jurisdictions, like beekeepers, fortune tellers, dog groomers, and librarians. What about economists?
Guest's article quickly strays into talking about ensuring certain standards of education for economists, which is separate from the question of whether they should be licensed. He also points out the gender gap in economics (which has been a theme I have discussed many times on my blog - see here and here for my latest posts on that topic). However, it isn't clear how licensing would address the gender gap, or the number (or distribution) of students studying economics more generally.
One thing we do know about occupational licensing is that it restricts competition. Only people who are licensed are allowed to practice that profession. That gives the licensed practitioners some degree of market power - it allows them to command a higher price (or salary, in this case). The outcome of licensing economists would likely be higher salaries for economists. It seems somewhat self-serving for an economist to argue in favour of licensing economists, in the same way that social workers or sex workers who argue for licensing are being self-serving.
It isn't clear to me that higher salaries for economists would address the gender gap in economics. In fact, it might even make it worse, if the marginal student that is attracted to economics by higher salaries is male, rather than female (at the least, we know that female economics students are less likely to specialise in finance, which tends to pay more).
Probably the best argument against licensing economists is defining who they are. Most economics graduates don't get a job with the title of 'economist'. Instead, the majority would end up an 'analyst' of some description (market analyst, business analyst, price analyst, etc.). So, how would you even enforce licensing? This probably explains why Guest focused on certifying economics education, rather than licensing economists directly.
So, should economists be licensed? It seems to me that the only people who would benefit would be economists.