Policy Studies Competition Policy

The Licensing Logjam


C. Jarrett Dieterle
Resident Senior Fellow, Competition Policy
Shoshana Weissmann
Director, Digital Media; Fellow

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This study was authored for National Affairs

Federal lawmakers have been talking about reforming the occupational-licensing regime for years. And despite widespread agreement on the right and left that licensing requirements are often unnecessary and burdensome — serving mainly to limit job opportunities and impede economic growth — attempts at reform at the national level have been rare, and those reforms that have been proposed have had little impact. Yet the federal government is far from powerless to help. While it is true that most far-reaching reforms must take place at the state level, there are many ways in which the federal government can reduce licensing barriers nationwide, while paving the way for states to pursue their own reforms.

Licensing has long been a common feature of American economic life, particularly following the Supreme Court’s 1889 decision in Dent v. West Virginia, which upheld West Virginia’s medical-licensing system. That ruling ushered in an era of follow-up decisions that preserved licensing regimes for a wide array of trades and occupations around the country. Today, such requirements are ubiquitous.

Groups like the Institute for Justice have even developed a cottage industry of sorts out of exposing credulity-straining licensing rules, such as Texas’s requirement that eyebrow threaders complete 750 hours of training at a cost of up to $9,000, or Savannah, Georgia’s 100-question multiple-choice exam for city tour guides. Many of these requirements have little or no connection to safety or public health; according to IJ, the average cosmetologist spends 386 days in training before earning a license, compared to just 34 days for emergency medical technicians. And in recent years, the harmful effects of such practices have become more apparent.

Read the rest of the study at National Affairs.

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