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This third edition of IJ’s landmark License to Work report finds that for lower-income Americans, licensing continues to be widespread, burdensome and—frequently—irrational. It also provides a blueprint for meaningful licensing reform.
- State is included in this study (FL, ME, MN, SC and UT do not regularly produce reports)
- State had a sunrise law but provided no reports for this study
- State enacted sunrise law too late for this study
- State had no sunrise law at time of publication
In recent decades, states have enacted occupational licensing laws covering a growing number of jobs, and now more American workers than ever must get a license to work. But do we need these new licenses? Independent government reports, known as “sunrise” reviews, suggest the answer is often no.
This study presents the first comprehensive analysis of state sunrise laws and reviews. Although sunrise laws vary, they are generally designed to protect the right to freely enter occupations by evaluating whether proposed licenses are necessary to protect the public—not to protect the interests of occupational lobbies. They task government agencies with reviewing licensing proposals using criteria such as whether there is proof of harm from an occupation, whether benefits of licensing would outweigh costs, and whether public safety could be better protected in a less burdensome or restrictive way.
We studied 15 states with active sunrise processes from 1985 to 2017, gathering the largest ever collection of sunrise reports—397 reports covering 494 separate reviews. These reviews cover over 200 different occupations, creating a rich dataset of government reviewers’ analyses of specific regulatory proposals.
Occupational lobbies, not consumers, drove the push for licensing.
- Occupational and professional associations initiated at least 83% of sunrise reviews, while consumer advocates were behind just 4%.
- A new license was by far the most requested regulation, in at least 67% of reviews. Proponents rarely sought less restrictive alternatives, such as certification or registration.
- Occupational lobbies’ campaigns for licensure often spanned multiple tries and several states. Some occupations sought review in the same state as many as five times, and two sought review in eight different states.
Sunrise reviews overwhelmingly recommended against licensing—and most recommended no new regulation.
- About 80% of reviews declined to recommend licensure. Most—54%—concluded no new regulation was needed, while 20% favored other, usually less restrictive, alternatives.
- This held true even for health-related occupations, with 75% of reviews declining to recommend a new or distinct license.
- And different reviewers tended to agree about the same occupations—usually recommending against licensure or any new regulation.
- Some states, such as Colorado and Hawaii, hardly ever recommended new licenses (in just 8% and 9% of reviews, respectively), while others did so more often. Arizona recommended new licenses the most by far, in 61% of reviews.
Legislatures often heeded reviews’ warnings against regulation, but they enacted licensing more often than recommended, especially in the long run.
- When reviews did not recommend licensing, legislatures followed their lead in 65% of cases. They ultimately declined to enact 189 of 273 licenses.
- But legislatures did enact 84 licenses that were not recommended, and overall, they enacted licenses about twice as often as recommended.
- Sunrise reviews’ influence may have been strongest in the short term. When legislatures ignored recommendations against licensure, it was often years after the review—eight years later, on average.
- Some states held the line against licensing better than others: While Maine and Georgia enacted licensing after just 15% and 26% of reviews, Arizona did so after 64%.
How Sunrise Recommendations Translated to Legislative Outcomes
Note: Recommendations of no new regulation mean just that; outcomes of no new regulation mean no new regulation of personal qualifications. The legislature may have adopted other regulations, such as business regulations. Outcomes reflect occupations’ regulatory status as of 2018.
As these findings illustrate, licensing policy is typically driven by special interests, not the public interest. Overwhelmingly, demands come from motivated parties, who may put professional status or economic gain ahead of sound policy, and, in fact, independent government reviews most often conclude these demands are wrongheaded. Yet, over the long term, organized pressure often prevails, creating needless hurdles to work.
Sunrise review is one tool for countering such pressure, and we found preliminary evidence that it may thwart or at least slow some unwarranted licensing proposals—though, to be sure, the rigor of states’ sunrise processes and reports varies a great deal. And more research is needed to determine whether states with sunrise processes—and stronger sunrise processes— do better at reining in licensing’s growth than those without.
More important, our results show why lawmakers ought to greet licensing proposals with healthy skepticism— with or without a formal sunrise process. When subjected to scrutiny, licensing proposals tend to fall apart. Despite the claims of occupational lobbies, 30-plus years’ worth of sunrise reviews suggest licensing often is not the answer.