Scope-of-practice regulation: Physician control and the wages of non-physician health-care professionals

We analyze the impact of licensing statutes that limit physician control over non-physician health-care providers. Contrary to the standard ''capture'' theory of regulation, we find that physical therapists have devoted considerable effort to obtain passage of laws that ultimately result in lower wages. This seemingly perverse result is robust across different data sets and various specifications. There is limited evidence to suggest that some physical therapists who treat patients without a physician's referral benefit at the expense of other therapists. However, it seems that non-monetary rewards associated with professional independence are the primary benefit to therapists from elimination of physician control.