Economic Liberty
Occupational Licensing

Occupational Licensing Relief and Job Creation Act

About a fifth of the American workforce must get a permission slip from the government—known as an occupational license—to legally work in their chosen occupations.

Getting a license can be costly and time-consuming, requiring fees, exams and many hours—sometimes amounting to several years—of education and experience. Steep licensing requirements serve as a barrier to occupational entry, imposing costs on workers, consumers and the wider economy.

Proponents claim that licenses improve service quality by screening out workers likely to provide inferior service. However, there is ample evidence to the contrary.

IJ’s research and those of other scholars show that real results run counter to the theory that licensing improves service quality. In fact, licensing, and progressively stricter forms of it, is not associated with greater service but higher costs, less innovation and fewer opportunities.

What can state legislators do?

The Institute for Justice offers the Occupational Licensing Relief and Job Creation Act.

To encourage the creation of new jobs and support economic development, this model recognizes the fundamental right to pursue one’s calling, limits occupational regulations to the protection of public health and safety, and provides a mechanism by which unreasonable occupational regulations may be challenged in state court.

Facing well-heeled lobbyists from powerful trade associations, state legislators may be reluctant to enact broad changes to occupational licensing regimes. Under this model, legislators can empower entrepreneurs to fight their own fights on a case-by-case basis. Workers can bring their disputes to state courts where judges can balance (1) the legitimate need for the protection of consumers from health and safety risks and (2) the fundamental right of Americans to pursue their callings.