Macroeconomic Costs of Credentialism
By Arnold Kling
Entrepreneurs in healthcare and education face unusually strong barriers to entry. Both industries are credentials cartels. Licensing and accreditation are key requirements to compete in those fields, and incumbents are in control of the process. In addition, particularly in education, the government subsidizes major service providers.
In the long run, education and health care are the sectors most likely to grow. The more impediments that there are to transformation of these sectors, the more difficulty the economy will have returning to full employment.