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

02-24-2021 08:37am

Cadence Learning shows promising early outcomes

A recent study by Brown University found positive results for both teachers and students from Cadence Learning’s virtual summer program.

Read more

02-17-2021 08:41am

Learning to love learning

We speak with Outschool founder Amir Nathoo to learn more about his venture and dream about the future of education.

Read more

02-10-2021 08:33am

Three ways to make college affordable

Social entrepreneur Vance Fried offers three practical ideas that could make a difference in college affordability and access.

Read more

Sign up for updates