The Case Against Occupational Licensing

Edward Rodrigue and Richard V. Reeves write

Since state licensing laws vary widely, a license earned in one state may not be honored in another. In South Carolina, only 12 percent of the workforce is licensed, versus 33 percent in Iowa. In Iowa, it takes 16 months of education to become a cosmetologist, but just half that long in New York. This licensing patchwork might explain why those working in licensed professions are much less likely to move, especially across state lines: [next they have a chart showing the lower rate of mobility for licensed professionals]

Pointer from Mark Thoma. The article points out several other adverse effects of overly restrictive occupational licensing.

It seems to me that in the interest of regulating interstate commerce, Congress could do pass a law saying that someone licensed in state X is entitled to work in that same occupation in state Y unless state Y can give a compelling reason unless state Y can provide a compelling reason otherwise. As its stands, variations in licensing requirements work like interstate tariff barriers, which our Constitution was designed to eliminate.

3 thoughts on “The Case Against Occupational Licensing

  1. I am a high school teacher certified in 3 states now and will be moving again shortly. Even though States allegedly have reciprocal agreements I have to fill out the exact same forms, submit the exact same college/high school transcripts, take the exact same Praxis test and of course pay the near-exact requisite fees.

    Is teaching high school social studies THAT different in each State? Rhetorical–I know it is not. Thanks! 🙂

    • Knowing nothing I can guarantee they don’t actually test for idiosyncratic differences, they just have idiosyncratic bureaucracy.

  2. Gee, Arnold, a few posts ago I think you took the position that the power of the federal government should be limited to defense, and that all other government functions should be devolved to the states, reconfigured to have no more than a few million people each. It appears from this post that you didn’t really mean that.

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