Licensure or License? *: Prospects for Occupational Deregulation 1

By Thornton, Robert; Timmons, Edward et al. | Labor Law Journal, Spring 2017 | Go to article overview

Licensure or License? *: Prospects for Occupational Deregulation 1


Thornton, Robert, Timmons, Edward, DeAntonio, Dante, Labor Law Journal


Introduction

The scope of occupational licensing in the U.S. has grown enormously in recent decades. For example, in the 1950s it was estimated that fewer than 5% of workers in the US needed a license to work at their jobs. But by 2008 this figure was close to 30%. In 2003 the Council on Licensure, Enforcement, and Regulation (CLEAR) estimated that more than 800 different occupations were licensed in at least one state, while today more than 1,100 occupations are said to be subject to licensing, certification, or registration requirements,2 although both the occupations and their numbers vary greatly across the states. (Council of State Governments; Kleiner and Krueger 2013; CLEAR)

Until fairly recently, occupational licensing was a subject that was largely ignored-not just by most legislators and economists, but by the general public as well. The pros and cons of requiring a license to practice certain occupations were not much talked about and certainly not subject to much criticism. After all, licensing could be said to protect consumers from incompetent or disreputable practitioners (think doctors here). It could also be said to ensure a high level of service quality (dieticians and barbers, for example.) As of late, though, occupational licensing has begun to attract a growing and increasingly vocal stream of critics. The criticisms reflect a number of concerns. For example, it has been alleged that too many occupations now require a license to practice and that the requirements for attaining a license in terms of costs and length of training are often excessive. Complaints have also been made that higher prices for the services provided by licensed practitioners are too often the result, and that the benefits to consumers in terms of higher quality are sometimes nonexistent. Finally, it has been charged that excessive licensing has resulted in adverse effects on employment opportunities and worker mobility, especially for those with lower levels of education.

In light of this new and growing criticism of excessive occupational licensing, what are the prospects for deregulation - or what we shall refer to as "de-licensing"? This is the subject of our paper. In the next section we discuss in more detail the reasons for the growing criticism that occupational licensing is facing. We then analyze the legislative efforts that twelve states to date have taken in the past four years to deregulate (de-license) certain groups of occupations. These de-licensing proposals have generally not gone through the usual sunset review process. The sunset review process mandated in many states involves periodic assessments of licensed occupations and licensing boards as well as their possible termination, unless continued by the legislature. Finally, we examine whether there are any particular state characteristics - economic, demographic, or political - that seem to increase the likelihood of de-licensing activity or proposals. We know of no theories of de-licensing per se, but there is a small extant literature concerning the various factors that tend to be associated with the passage of licensing legislation. Could some of these same factors explain recent attempts to de-license occupations?

The Growing Outcry against Occupational Licensing

Although the "case" against occupational licensing was first made popular by Milton Friedman (1962) and by Friedman and Kuznets (1945) more than 50 years ago, the hue and cry against it did not gather much popular support until the last decade.3 The reasons for the turnaround are several. First, licensing has increasingly spread into occupations for which the protection of the public hardly seems necessary and, in some cases, where requiring a license to practice seems ludicrous. For example, in a list of what he refers to as the nation's "most outrageous licensing laws," Adam Summers notes that fortune tellers require a license in Maryland, junkyard dealers in Ohio, rainmakers in Arizona, and manure applicators in Iowa. …

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