Land of the Free? 50 state study on how professional licensing laws lead to fewer jobs

Will Flanders & Collin Roth:

Occupational licensing laws, or state permission slips to work in certain regulated professions, serve as a major barrier to entry for workers in America. For aspiring cosmetologists, manicurists, massage therapists, and aestheticians, licensing requirements can mean thousands of hours of training, tens of thousands of dollars for school, and regular fees to the state. These laws force people with skills and aspirations to take on debt they cannot afford, defer their dreams, or conduct their trade underground with the accompanying threat of fnes and prosecution.In 1950 just 1 in 20 workers required a license to work, now close to 1 in 4 do. With more professionals, and aspiring professionals, running into licensing laws, the case for reform has found an increasingly broad and diverse audience. Coalitions of liberal and conservative activists and policy experts, Democrat and Republican governors, and the Obama and Trump administrations have all embraced the cause of licensing reform. And while progress has been made in this reform movement, rigorous research into the effects of licensing on workers and the broader economy are still in their infancy.This peer-reviewed1 study examines, for the frst time, the impact of licensing requirements across the country on ten low and moderate income professions. For each state we created a Red Tape Index which measures the license requirements, i.e. fees, training hours, exams required, and minimum age, for ten professions. Then we looked at how employment related to a state’s score on the Red Tape Index. Our