The Inverted Pyramid: 10 Less Restrictive Alternatives to Occupational Licensing

[E]mpirical evidence is scarce for the proposition that licensing protects the public. By contrast, it is widely recognized that licensing raises prices for consumers, restricts job opportunities and hinders innovation. By one estimate, licensing means 2.85 million fewer jobs and costs consumers an additional $203 billion each year. And because people with criminal records are frequently barred from working in licensed occupations, licensing laws may also contribute to recidivism by impeding people’s ability to find honest work…
One rhetorical tactic bottleneckers employ is to present regulation as a binary choice: An occupation can either be licensed or it can be left entirely unregulated. But, in fact, there are many voluntary and regulatory options short of licensing that protect consumers without putting up roadblocks to honest work. The purpose of this paper is to illustrate 10 alternatives to licensure, organized from least to most restrictive.

John Ross

Institute for Justice

November 2017

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