Regulated professions Agenda point 3.5 DSS Meeting 25 February 2015 Directive 2005/36/EC applies to the recognition of professional qualifications when a profession is regulated in a host Member State DG GROW / D4, Free movement of professionals Joanna SMOLINSKA

Why a new variable on regulated professions ? 6000 different professions across the EU All sectors: medical doctors, taxi drivers, hairdressers.. 9 to 24% of EU labour force concerned Reforming access to professions is said to be beneficial mostly for young people, where unemployment rate (22%) is twice as high as for adults But there is no comparable data to show the effects of regulation and reforms over time and in the long run 29% of labour force in the US Young = below 25

Regulated professions – political context European Semester: since 2011 Country Specific Recommendations on the need to reform regulation of professions (10 countries in 2014) – need for evidence on how this evolves Council conclusions 2012, 2013: "reduce the number of regulated professions and remove unjustified regulatory barriers" Annual Growth Survey 2014: "ambitious implementation of structural reforms of […] services markets" National reforms : CY, CZ, EL, ES, FR, IT, PL, PT, SI Council conclusions March 2012: « reducing the number of regulated professions and removing unjustified regulatory barriers” Council conclusions October 2013: « The European Council stresses the importance of the mutual evaluation of regulated professions launched by the Commission and calls for swift progress. This exercise should identify the remaining barriers to access to professions in the Member States, assess the cumulative effect of all restrictions imposed on the same profession, and suggest appropriate action.” Council conclusions March/June 2012, Oct 2013 Annual Growth Survey 2014: "ambitious implementation of structural reforms of […] services markets" Country specific recommendations: explicit reference to regulated professions for 8 countries in 2014 Transparency and mutual evaluation exercise (ongoing) National reforms : CY, CZ, EL, ES, FR, IT, PL, PT, SI

New variable(s) on regulated professions in LFS to (1) identify whether an individual is legally required to fulfil additional requirements to practice profession and (2) which body granted this authorisation. Information currently not included in LFS EU. Not possible to fully describe labour force status of the EU population nor to evaluate labour market outcomes. Variable(s) proposed inherently linked to labour market

Regulated professions – definitions Definition: professional activity access to which or at least one mode of pursuit of which is subject to the possession of professional qualifications by way of national regulation. Regulated = certification, license, exam, membership in a professional association to be able to work in a profession "Protected title (without reserves of activities)" is used for the professions where only the title is protected. ex: chartered accountants in the UK Registration/Licenses:Authorisations granted by competent authorities to professionals prior to the exercise a given profession (can be territorial but not only). Ex: craft professions in Germany, taxi drivers in France "Reserves of activities": this term is used for the professions where activities are reserved to the holders of a specific professional qualification, including where there are shared reserved activities with other regulated professions. Ex: activities related to designing buildings are exclusively reserved to architects in many Member States. ex: doctors, teachers

Labour force – what we don’t know What is the proportion of labour force concerned What are the socio-economic characteristics of those regulated How different types of regulation are distributed in the population, in addition to traditional academic degrees What are the labour market outcomes: effects on employment, earnings, mobility and skills

US - Current Population Survey revision (1/2) New variable in Current Population Survey as of 2015 "Certification/licensure is a topic that aligns closely with the CPS goal of collecting information about factors that impact labour market success" [Bureau of Labour Statistic] Three questions on regulation of professions added in place of three questions on educational attainment The Current Population Survey (CPS) statistical survey conducted by the US Census Bureau provides estimates of the number of employed/ unemployed in the US employment-focused, enumerator-conducted, continuous, and cross-sectional. monthly survey of about 60,000 households. The sample represents the civilian non-institutional population. The survey asks about the employment status of each member of the household 15 years of age or older as of the calendar week containing the 12th day of the month.[6] Based on responses to a series of questions on work and job search activities, each person 16 years and over in a sample household is classified as employed, unemployed, or not in the labor force. !!! The computerized questionnaire for just the labor force portion of a CPS interview consists of more than 200 questions. However, complex skip patterns using the responses to several questions insure respondents are asked only a very small set of questions about themselves. Averaged over the 8 months of interviews, the labor force portion of the CPS interview lasts about 6 minutes per person. Obviously, larger households and households containing someone who has multiple jobs or started a new job take longer. Single-person households or households containing only retired persons who do not wish to work take less time.

US - Current Population Survey revision (2/2) Questions to identify whether: respondents have a currently active professional certification or license; any of those credentials were issued by Federal, State, or local government; credential is required for an individual's main job. Certification questions CERT1 Question Text: (Does/do) (name/you) have a currently active professional certification or a state or industry license?  Do not include business licenses, such as a liquor license or vending license. (Read if necessary:  a professional certification or license shows you are qualified to perform a specific job.  Examples include a realtor license, a medical assistant certification, a Teacher’s License or an IT certification. Only include certifications or licenses obtained by an individual.) Responses: Yes No   CERT2 Question Text: Were any of (your/his/her) certifications or licenses issued by the federal, state, or local government? CERT3 Question Text: (Earlier you told me (you/name) had a currently active professional certification or license.  Is (your/his/her) certification or license required for ((your/his/her)/the)/ In a previous interview it was reported that (you/name) had a currently active professional certification or license.  Is that certification or license required for ((your/his/her)/the)) (job?/main job?/job from which (you/he/she) (are/is) on layoff?/job at which (you/he/she) last worked?) Responses: Yes No Don’t have a currently active certification or license

Why not administrative data? (1/2) Absence of consistent and comparable data at national and EU level National authorities often don’t know themselves Regulation can take place at EU, national, regional or local level How many licenses are active? Data not comparable between national sources Current estimates too approximate ISCO 4 digits not detailed enough EC Database of Regulated Professions not updated consistently and in uniformed manner No information on active licenses

Why not administrative data? (2/2) Number of regulated professions says nothing about the number of affected workers. Researchers match LFS microdata with EU Regulated Professions Database, but ISCO3422: Sports coaches, instructors and officials – some countries regulate sports instructors but not sports officials – not possible to disentangle nor to go to specific categories (ski instructors) Results: lower/ upper bounds of prevalence (2012 data) N° reg prof % workers EU Reg. Prof. Database Estimates based on matching PL 162 14-27% UK 131 11-21% DK 90 13-43% FR 13-20% IT 86 6-27% DE 4-31% CY 60 9-30% EU 9-24%

Why LFS? Synergies: socio-economic characteristics of workers Employment status, age, education, work patterns, migration Link with NACE, ISCO Time-series: to measure impact of regulation on labour market over time, also on profession-specific basis Economic theory says occupational regulation reduces employment, but increases wages and skill levels; But this may also mean: monopoly rents and reduced accessibility of services for consumers. Level of skills is linked to productivity at EU Level and has implications for the long-term competitiveness of the EU labour market.

Pilot survey in 2015 (DG GROW) EU-wide, one-off survey on active population Sample size: 25'000 valid questionnaires EU Too small sample for profession-specific analysis Results mid-2015 LFS questions on labour/professional/education status Questions specific to regulated professions (professional experience, traineeship, or fees paid, mobility, behavioural regulation, attitude towards regulation). Sample size: + - 25'000 valid questionnaires EU (linked to budgetary constraints) => the survey will not allow draw any conclusions on profession-specific based 1000 valid questionnaires per EU Member State (but for the smallest ones, CY, MT, Baltic countries: 500) Pilot to test the questionnaire in 5 countries Dec 2014 Questions tested: (for those who are actually employed) "Are you required to have any specific qualifications to legally do your job? For example, in most countries one cannot legally give medical advice unless one is qualified to be a medical doctor. Answer yes even if just one specific task related to your job legally requires a specific qualification" (for those who are curently unemployed) "Do you have any specific qualifications that give you the legal right to practice a profession that other people cannot do?"

Key questions tested Do you have a professional certification, licence or did you have to take an exam which is required to practice your occupation? (on top of your education) Interviewer instruction: A professional certification or license shows you are qualified to perform a specific job and may give you the right to enter a regulated profession or professional association. Only include certifications or licenses obtained by the respondent as an individual. Examples include "licensed medical doctor" and "licensed taxi driver". Yes / No – but currently in process of obtaining one / No Do you have a professional certification, licence or did you have to take an exam which is required to practice your occupation? (on top of your education) Interviewer instruction: A professional certification or license shows you are qualified to perform a specific job and may give you the right to enter a regulated profession or professional association. Only include certifications or licenses obtained by the respondent as an individual. Examples include "licensed medical doctor" and "licensed taxi driver". If needed, clarify that we ask about requirements ADDITIONAL to the academic education IF UNEMPLOYED, THE OCCUPATION THEY HAD BEFORE BEING MADE UNEMPLOYED. IF NO PREVIOUS OCCUPATION, CODE NO Yes No – but currently in process of obtaining one No

Key questions tested Without this professional certification, license or exam (authorisation), would you be legally allowed to practice your occupation? Interviewer instruction: Refer to the respondent's specific occupation and personal circumstances. Refer to the current laws and regulations affecting the respondent's occupation (current main paid job). Yes/ No Who grants this authorisation? 1) a national government or regulatory body 2) a regional government or regulatory body, 3) a local government or regulatory body, 4) a professional association 5) someone else

Thank you for your attention! joanna.smolinska@ec.europa.eu Regulated professions on Europa: http://ec.europa.eu/growth/single-market/services/qualifications/index_en.htm