Benefits of Competition and Indicators of Market Power

As highlighted in a recent White House report, the share of workers in occupations requiring some sort of State license grew fivefold over the last half of the 20th century, which fundamentally creates entry barriers for firms and workers. Though they are in some cases merited, such licensure requirements have the potential to make it more difficult for workers to move across State lines or between jobs, thus imposing a drag on the productivity of local economies. Importantly, some State occupational license requirements can be thought of as anti-competitive policies that protect labor market incumbents to the detriment of other workers and society as a whole.

The White House

April 2016

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