NCPA - National Center for Policy Analysis

License to Work

May 11, 2012

An occupational license is, put simply, government permission to work in a particular field.  To earn the license, an aspiring worker must clear various hurdles, such as earning a certain amount of education or training or passing an exam.  Of interest is the trend in increasing licensure: while only one in 20 workers in the 1950s required licensing, that figure has since risen to one in three.

The Institute for Justice, in assessing the economic impact of these licensing trends, documented the license requirements for 102 occupations nationwide.  It noted in its study that these laws can pose substantial barriers for those seeking work.

  • The 102 occupational licenses studied require of aspiring workers, on average, $209 in fees, one exam, and about nine months of education and training.
  • Thirty-five occupations require more than a year of education and training, on average, and another 32 require three to nine months.
  • At least one exam is required for 79 of the occupations.
  • Sixty-six occupations have greater average licensure burdens than emergency medical technicians.

These requirements vary substantially from state to state.

  • Louisiana licenses 71 of the 102 occupations -- more than any other state -- followed by Arizona (64), California (62), and Oregon (59).
  • Wyoming, with a mere 24, licenses the fewest, followed by Vermont and Kentucky at 27.
  • Arizona and California rank as the most widely and onerously licensed states, with a large number of licensed occupations and burdensome requirements.

Furthermore, the licensure requirements differ a great deal between jobs and states.

  • Only 15 occupations are licensed in 40 states or more, with many having requirements in only a small number of states.
  • Residential HVAC contractors, for example, are required to obtain licenses in only five states.
  • Similarly, 10 states require four months or more of training for manicurists, while these workers need only have three days experience in Alaska and nine in Iowa.

As millions of Americans struggle to find productive work, one of the quickest ways legislators could help would be to reduce or remove needless licensure burdens.

Source: Dick M. Carpenter II, Lisa Knepper, Angela C. Erickson and John K. Ross, "License to Work," Institute for Justice, May 2012.

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