Occupational Licensing: Learning the Basics

The share of workers licensed at the state level has increased five-fold since the 1950s, and, currently, a full third of U.S. jobs require a license. With the average state license for low- and moderate-income professions requiring $209, nine months of education and training, and an exam, it’s time to ask: What, if any, benefits do we gain from placing these burdens of occupational licensing on individuals?

The answer paints a bleak picture. Studies show that despite the increase in licensed workers since the 1950s, occupational licensing results in little improvement of the quality and safety of goods and services. Additionally, unlicensed workers are often as qualified as their licensed counterparts, meaning such licensing practices have an insignificant impact on experience within a profession.

Licensing does affect other areas of the economy, however: Requiring workers to obtain occupational licenses has resulted in higher prices, with costs increasing by between 5 and 33 percent. Just as concerning is the impact of occupational licensing on employment: Research finds that job growth may be reduced by up to 20 percent in occupations that require licensing.

The Charles Koch Institute remains committed to working toward a freer society and the increased well-being it provides for the overwhelming majority of people. To that end, we invite new and continuing research into the implications occupational licensing holds for the economy and how such practices affect individuals across the nation.

More Blog Posts

06-11-2018 03:06pm

North Korea—Rational Actor, or Unbalanced Risk-Taker?

Could history made in the spring continue through the summer? After tense missile tests and discussions of “bloody nose” strikes, the Korean peninsula has been experiencing a period of unprecedented diplomacy.

Read more

Survey on North Korea: Americans, South Koreans Want Diplomacy Rather Than Military Engagement

In a new survey by the Charles Koch Institute and Real Clear Politics, Americans and South Koreans overwhelmingly agreed that they do not want to pursue military action against North Korea, whether or not the June 12 summit is successful in securing denuclearization of the Korean Peninsula.

Read more

05-17-2018 11:05am

An Untapped Talent Pool: SHRM and the Charles Koch Institute’s Survey on Employing Individuals With Criminal Records

To learn more about what drives hiring decisions involving people with a criminal record, the Charles Koch Institute and the Society for Human Resource Management have conducted a groundbreaking survey of employers and the American workforce.

Read more

Sign up for updates

Sign up to receive weekly updates in news and events.