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Freakonomics Radio

621. Is Professional Licensing a Racket?

Feb 7, 2025
Rebecca Allensworth, a Vanderbilt law professor and author of "The Licensing Racket," critiques the pervasive system of professional licensing in the U.S. She reveals how licensing began in medicine and law but now extends to diverse fields like hairstyling and auctioneering, often creating barriers for qualified workers. Allensworth explores the self-dealing nature of licensing boards, their failure to protect the public, and the hidden costs totaling $250 billion annually. Her insights challenge listeners to rethink the necessity and ethics of these regulations.
55:15

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Quick takeaways

  • Professional licensing boards often prioritize the interests of active professionals over public safety, creating significant conflicts of interest.
  • The current licensing system imposes high barriers to entry that disproportionately affect marginalized groups, exacerbating social inequalities in the workforce.

Deep dives

The Role of Professional Licensing Boards

Professional licensing boards are regulatory bodies that determine who can enter various professions, but they are often composed of active professionals in those fields. This setup creates a conflict of interest as board members may prioritize the interests of their profession over public safety and consumer protection. Rebecca Allensworth, a researcher on this topic, describes licensing boards as resembling professional associations more than governmental agencies, leading to a failure in accountability and oversight. The imbalance allows dangerous professionals to continue practicing while keeping qualified candidates out of certain professions due to stringent licensure requirements.

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