Prevent New Licenses

Outside of repealing licenses, the best way to mitigate licensing’s negative effects is to stop adopting new licenses unless they are shown, with high-quality evidence, to protect public health and safety. When confronted with licensing proposals, lawmakers can use the same resources outlined above to critically examine whether they are truly necessary. To help in their review, they can also create a formal sunrise program. 

As described above, sunrise reviews help legislatures evaluate whether proposals for new (and sometimes expanded) licenses and other occupational regulations are essential to protect the public or instead are needless barriers that serve only to restrict competition. And, indeed, when done well, sunrise reviews can slow, if not stop, licensing’s growth. IJ’s 2022 study of nearly 500 sunrise reviews found that when reviews did not recommend a new license, legislatures usually followed their lead—especially in the short term. 1

But not all sunrise reviews are well done. Before enacting or reforming sunrise laws, legislators should understand what makes for good sunrise reviews. IJ’s study points to several core characteristics of sunrise processes that result in rigorous reviews. The sunrise processes that produce the most in-depth reviews examine three key questions: 

  1. Is the harm to public health and safety well documented, significant and widespread, not merely anecdotal, potential or even likely? 
  2. What are the probable costs and benefits of the proposed regulations, and do the benefits outweigh the costs? 
  3. Where harms exist, what is the least restrictive voluntary or regulatory option available to best address them? 

Answering these questions helps sunrise reviewers appropriately balance the competing government interests underlying all occupational regulation: public health and safety and open occupational entry. And doing so properly requires that review offices be shielded from political pressure with ample time and resources to conduct thorough, unbiased inquiries.  2

Importantly, sunrise reviews should not be confused with sunset reviews. Sunset programs review existing regulations and related government bodies, such as licensing laws and boards, to determine whether they are still (or were ever) necessary. The jury is out on sunset’s efficacy, but sunrise is generally preferable because it can keep unnecessary licenses off the books in the first place. However, policymakers interested in sunset or other formal licensing reviews can draw on the same best practices for successful sunrise programs.