Economics, Pethokoukis, Regulation

The growing scourge of occupational licensing

Morris Kleiner, a professor of public affairs at the University of Minnesota, in The New York Times:

In the 1970s, about 10 percent of individuals who worked had to have licenses, but by 2008, almost 30 percent of the work force needed them.

With this explosion of licensing laws has come a national patchwork of stealth regulation that has, among other things, restricted labor markets, innovation and worker mobility. There is a role for government in protecting the public from incompetent or unscrupulous service providers, but there is little reason for math teachers to be relicensed every time they move from one state to another. These requirements put additional burdens on teachers that reduce the ability of good teachers to find work and schools to find good teachers.

Having more flexible reciprocity between states for occupations like teachers would allow these professionals to move to jobs more easily. But even better would be to stop requiring licenses for jobs whose potential harm to the public is minimal, like tour guides, and instead allow for certification. This lesser form of regulation provides a distinction in the eyes of a consumer but does not forbid others from offering the service.

Read the whole thing.

Follow James Pethokoukis on Twitter at @JimPethokoukis, and AEIdeas at @AEIdeas.

3 thoughts on “The growing scourge of occupational licensing

  1. So, math teachers should take tests for each job to prove themselves instead of one test per state? It’s all in how you frame the inefficiency.

  2. “There is a role for government in protecting the public from incompetent or unscrupulous service providers, but there is little reason for math teachers to be relicensed every time they move from one state to another.”
    Please give me an example of one law/regulation/rule that has protected the consumer from the likes of Bernie Madoff, any tort lawyer, VA doctors looking for bonuses, corrupt legislators and bureacrats.

    • Doctors and lawyers need licenses, but Bernie and your local neighborhood pols are good to go on their own say. The hiccup here is that professionals often answer to self regulatory organizations that aren’t overly motivated to expose incompetence in the ranks.
      It’s safe to say that it could be worse — was worse back when John D. Rockefeller in his charitable role pushed to require legit medical educations for docs and campaigned against the proverbial snake oil salesmen.

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