occupational licensing

occupational licensing 2018-06-08T12:18:36+00:00
Occupational licensing by state governments has spread dramatically in recent decades. Today, around 25 percent of American workers need a state license to do their job—up from 10 percent in 1970. Over 1,000 different occupations are now regulated in one state or another. Although these regulations are justified in the name of protecting consumers’ health and safety, the evidence that licensing improves consumer welfare is weak. By contrast, there is extensive evidence that licensing is a great deal for incumbent service providers, boosting their incomes by making it harder for potential competitors to enter the market. This barrier to entry discourages innovation, exacerbates income inequality at the high and low ends, and undermines geographic mobility.

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