This paper examines the existing research on the effects of occupational licensing and concludes with a discussion of possible reforms. Existing studies have yet to find a definitive link between licensing restrictions and their stated purpose of improving service quality. Several studies do find, however, that licensing requirements raise pay for licensed workers, but with a cost: reduced employment and higher consumer prices. Overall, the evidence suggests there may be gains from policy reforms that allow greater room for less restrictive alternatives, such as voluntary certification.
Josh T. Smith, Vidalia Freeman, and Jacob M. Caldwell
Center for Growth and Opportunity
December 2018
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