Cato Daily Podcast
The Work Yet to Be Done to Free Workers from State Licensing
Dec 9, 2024
Ed Timmons, Director of the NEE Regulatory Research Center, dives into the world of state-level occupational licensing. He reveals that a staggering one in three jobs requires a license, creating barriers to workforce mobility. Timmons questions the effectiveness of medical licensing and highlights the impact of excessive regulations on economic progress. He advocates for universal license recognition to ease transitions between states and discusses recent reforms in Ohio to improve board impartiality. The discussion underscores the need to streamline licensing to boost workforce participation.
16:48
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Quick takeaways
- Occupational licensing has surged from one in ten to one in three jobs licensed, restricting economic competition and job access.
- Reform efforts for universal license recognition across states may unintentionally solidify existing regulations instead of reducing them.
Deep dives
The Impact of Occupational Licensing on Economic Performance
Occupational licensing significantly hampers economic performance, with states enacting more licenses over time. Historically, only one in ten occupations were licensed, but that number has increased to about one in three. This growth in regulation often restricts competition and keeps individuals out of the job market, thus limiting economic opportunities. For example, Texas licenses 199 out of 284 examined occupations, the highest in the study, while Kansas licenses only 136, illustrating the stark differences in regulatory approaches across states.
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