Introduction

Altagracia Yluminada Sanchez, who goes by Ilumi, came to the United States from the Dominican Republic in 1995 in search of a better life. Today, she owns her own small business, a day care she runs out of her home in Northeast Washington, D.C. The day care serves nine children and their families. Despite her years of experience caring for children—both her own and other people’s—Ilumi nearly had to close her day care and lose an important source of income for her family.

The problem was not unhappy customers. None of the families whose children Ilumi cares for complained about the quality of her care. ¹ Instead, the problem was that the District of Columbia’s Office of the State Superintendent of Education decided Ilumi—and hundreds of other day care providers—needed an associate degree in an early childhood field to go on caring for young children. ²

Ilumi values education—she has a law degree from the Dominican Republic and a Child Development Associate credential from this country—but she does not have time to attend school while running her business. Nor can she afford college. Even if she could, English is her second language. She speaks it well enough to do her job, but she cannot read or write it at a college level. It simply is not realistic for her to go back to school to earn an associate degree just to keep running a business she has run successfully for over a decade. ³

Ilumi is not alone. The time, money and English-language skills required to obtain an associate degree are an insurmountable obstacle for many day care providers in the District of Columbia. ⁴ These workers, mostly women, ⁵ work full time on top of other responsibilities, such as caring for their own families. ⁶ They earn low wages comparable to those of fast-food restaurant workers. ⁷ Many are immigrant women whose first language is not English. ⁸ Yet they stand to lose their jobs if they do not comply with the college requirement.

This is bad news not only for day care providers but also for the families they serve. Child care in the District of Columbia is already hard to find and expensive—the District has the highest child care costs in the nation ⁹ —and the college requirement will only make it even harder to find and more expensive.

The college requirement is also unnecessary. The majority of courses required to obtain an associate degree in an early childhood field are entirely unrelated to caring for young children. ¹⁰ It makes no sense to force people to take classes in public speaking or statistics, especially people like Ilumi who already have what matters most—experience and passion for caring for children.

The parents of the District of Columbia broadly agree. Parents, day care providers and other concerned citizens submitted hundreds of comments to the Office of State Superintendent of Education opposing the college requirement. ¹¹ One parent, Jill Homan, has teamed up with Ilumi, another day care provider and the Institute for Justice to challenge the college requirement in federal court. ¹²

Shortly after the lawsuit was filed, OSSE changed its regulations to allow people like Ilumi and others with at least 10 years of experience to apply for a renewable waiver. ¹³ This means Ilumi’s business is safe for now, but many other day care providers’ jobs are still at risk. In August 2022, the U.S. Court of Appeals for the District of Columbia Circuit ruled that the associate degree requirement could stand. ¹⁴

This story is a microcosm of the problem of occupational licensing nationwide. Recognition is widespread and growing that licensing has steep costs, while the benefits to consumers are often elusive. Indeed, in decades of research, the most consistent findings have been that licensing (1) restricts employment by making it harder to enter licensed occupations and (2) increases costs for consumers by limiting competition. Recent studies continue to confirm these results. ¹⁵

Scholars have also begun to explore other ill effects of licensing. Licensing reduces the rate of business employment and growth, curtailing the economic benefits of entrepreneurs starting new businesses. ¹⁶ Licensing requirements make it harder for people to change occupations ¹⁷ and shut out experienced workers who move to states that do not recognize their licenses. ¹⁸ In addition, licensing reduces the likelihood of immigrants, racial and ethnic minorities, and women entering licensed occupations, ¹⁹ and it often bars people with criminal records—even those involving long-past or irrelevant offenses—from occupations. ²⁰

Against such costs, licensing’s promised benefits largely fail to materialize. Though proponents claim licensing is necessary to protect the public and ensure quality, most research indicates licensing does not significantly or substantially increase quality. ²¹

This third edition of License to Work provides an updated snapshot of licensing’s extent and burdens by cataloguing licensing requirements—such as mandatory education and experience, exams and fees—for 102 low- and middle-income occupations across all 50 states and the District of Columbia. It also provides, for the first time, a report on licensing requirements for those same occupations in Puerto Rico.

In another first for this edition, we present an overview of major changes in licensing requirements for the 102 occupations we have tracked since the second edition, published in 2017. We also report on changes since the first edition, published in 2012, for a subset of occupations consistently observed across all three editions. The comparison dataset we prepared for this study is a unique resource for anyone interested in how the breadth and burdens of occupational licensing have changed over the past 10 years. It is available at https://ij.org/report/license-to-work-3/ltw3-data/.

Our comparison dataset reveals that, despite encouraging but modest trends toward delicensing and reducing licensing burdens over the past five years, licensing requirements overall continue to be steep and often irrational.

Between 2017 and 2022, states created 16 new licenses across our sample of 102 occupations but eliminated 26. This is a reversal of the prior five-year trend, which saw states create more licenses than they eliminated between 2012 and 2017.

Beyond new and eliminated licenses, licensing requirements mostly either remained the same or increased. Most increases were for fees. But in good news for aspiring workers, nearly 20% of licenses became less burdensome. And in even better news, reductions to mandatory education and experience—the most burdensome type of licensing requirement—represented nearly 22% of requirement decreases. Improvements clustered in the contractor trades, particularly in Utah and Arkansas, while barbering and beauty licenses also saw burdens drop.

Still, across all the occupations we study, average burdens remain high—362 days of education and experience, at least one exam, and $295 in fees. Since 2017, education and experience requirements have decreased by 22 days on average, while average fees have risen by $15. ²²

In short, despite some notable improvements, licensing requirements for aspiring workers continue to be widespread and burdensome. There remains much room—and need—for licensing reform nationwide.