Relaxing Restrictions on Occupational Licensing as a Response to COVID-19

March 24, 2020 by CIRHR Communications

In an earlier post, Dionne Pohler, Rafael Gomez, Kourtney Koebel of the CIRHR and Marc-Andre Pigeon and Murray Fulton of the University of Saskatchewan highlighted how a Targeted Basic Income could be an equitable policy response to COVID-19. Their argument drew on earlier research from the Centre by Koebel and Pohler. In this post, Morley Gunderson and Rafael Gomez of the CIRHR and Tingting Zhang of Merrimack College expand those policy options to include relaxing restrictions on occupational licensing to facilitate responding to the crises. It too draws on earlier research conducted at the Centre by Tingting Zhang (Effects of Occupational Licensing and Unions on Labour Market Earnings in Canada) and by Rafael Gomez, Morley Gunderson, Crystal Huang and Tingting Zhang (Do Immigrants Gain or Lose by Occupational Licensing?).

While the arguments presented here focus on the current pandemic of COVID-19, they are relevant to other pandemics or one-off unanticipated shocks. These include recent past events such as the earthquake and fire in Kobe Japan in 1995, mad cow disease in the United Kingdom and Europe in 1996, the terrorist attacks in New York in 2001, the European floods of 2002, the SARS pandemic of 2003, the earthquake and tsunami in the Indian ocean in 2004, Hurricane Katrina and the floods in New Orleans in 2005, the Nuclear disaster in Fukushima Japan in 2011, the Ebola crises of 2014-16, and Hurricane Matthew in Haiti in 2016.

While the sources of the natural disasters are varied, they have common characteristics. They are unanticipated one-off shocks, so emergency responses to the crises are not regularly in place. Especially in the cases of contagious diseases, they involve spillovers or externalities that affect third parties, and there can be an incentive for infected parties to deny that they are infected to avoid social ostracism. Early intervention is crucial but often hindered by the desire to avoid panic, but when contagion sets it involves exponential growth. Whatever the type of disaster, but especially with pandemics, they generally put pressures on the health care system, requiring quick responses for additional resources and a reallocation of existing resources. These common characteristics are certainly true of the current COVID-19.

Pressures on the health care system have been met with a number of responses. Hospital resources like beds and intensive care units have been reallocated to deal with COVID-19, but this can endanger those who would normally rely on such facilities. Triaging has occurred with respect to allocating ventilators and other scarce resources such that the usual dictum of “treat the sickest first” has been replace by “save those most likely to survive” and “save the most lives and the most life years.” The production of ventilators as well as testing kits have been ramped up and regulations as to who can do the testing have been relaxed. Staff have been working long hours. Efforts have been made to draw the reserve of retired health care staff back into service.

In addition to retired health care workers, a further reserve of such workers lies in those who have expertise in health care but are unable to practice aspects of health care because of occupational licensing. Such regulations give the exclusive right to practice to those who have the occupational license; they, and only they, can practice the profession. Such regulations are rationalized on the ground of protecting the public in situations where it is difficult for consumers to judge the quality of the service and where considerations of severe negative effects can prevail, especially with respect to health and safety. The licensing requirements are determined by self-governing bodies in each profession. They are given that power by government on the grounds that they have the expertise to determine what is required to practice in their profession. In Canada, the licensing requirements are established at the provincial/territorial level, and they often differ across the provinces/ territories. The regulations involve such factors as the education, training, residency and testing requirements to obtain the license, as well as recognition of foreign credentials and restrictions on the number of slots in universities for the training of such personnel. Since the regulations are set at the provincial level, they can involve different requirements and thus restrict the inter-provincial mobility of such persons.

While the licensing requirements are ostensibly designed to protect the public, there is concern that the regulations are overly restrictive and designed to protect the incumbent practitioners by restricting supply into the profession. The concern is that licensed practitioners control both the demand for their services, since the general public often has to rely on their expertise to know how much of the services are needed, and the supply into their profession through the licensing procedures.

There is general agreement in the economics literature that the licensing requirements are overly restrictive and that relaxing them somewhat would not jeopardize the general public. In his own extensive work and in reviewing the literature, Morris Kleiner (2006, p. 44),1 who is generally regarded as the world expert in this area, concludes: “Although policymakers may wish occupational licensing to be a method of enhancing quality, there is little evidence to support this assumption for consumers.” This strongly suggests that relaxing some of the restrictions on occupational licensing would not adversely affect patients. This would be true in general, but it is even more true in pandemics such as COVID-19 where the lack of staff and the overworking of existing staff who are putting their own health at risk can jeopardize the response to such a crises. Possibilities for relaxing some of the constraints include:

  • Granting temporary licenses, for a reasonable amount of time and with no fees, to retired staff or those who left the profession and whose licenses may have expired. 
  • Recognizing the credentials from other provinces, which may have different requirements, to allow movement to provinces where shortages are more acute. Viruses know no borders; the same should apply to qualifications.
  • Expediting the licensing procedure for those close to meeting the requirements.
  • Expanding the scope of practice for some professions so that they can do some of the critical procedures, perhaps under the supervision of those who have the licence to do the procedures (e.g., allow a family physician to do emergency department work if such work is strained to capacity).
  • Extend the expiration date for those whose license is about to expire.
  • Relax some of the final steps for those who have almost completed their requirements, for example, by allowing medical and nursing students who complete practical training to practice before passing the professional entrance exam.
  • Facilitate teleconferencing for health care—this can expand services and reduce the risk to health care providers through social distancing. Or relax the restriction on the proportion of telemedicine allowed by medical professionals with various licences.
  • Facilitate pharmacists providing more health care information and services.
  • Relax the restriction on nurse-patient ratios in the state of emergency.
  • Consider the use of groups such as personal support workers who do not require a licence to practice but can be very useful in such times of emergency.

To their credit, professional regulatory bodies are providing many of these responses, as indicated in their websites. Nevertheless, their responses are not uniform or complete across the different jurisdictions. What appears to be needed is a consistent and co-ordinated response to relax some of the restrictions of occupational licensing and to co-ordinate with Ministries of Health. Existing health care providers are putting their own lives at risk. Reducing that burden through relaxing restrictions in occupational licensing would be in their interest and in the interest of the general public.

Rafael Gomez, and Morley Gunderson are faculty at the Centre for Industrial Relations and Human Resources at the University of Toronto.

Tingting Zhang is a PhD graduate of the Centre and Assistant Professor, Management at Merrimack College in North Andover, Massachusetts. Her PhD thesis is on occupational licensing. 


1Kleiner, M. 2006. Licencing Occupations: Ensuring Quality or Restricting Competition?  Kalamozoo, MI.: Upjohn Institute for Employment Research.