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Archbridge Institute Report: Too Much License?

December 28, 2018
By Edward Timmons, Brian Meehan, Andrew Meehan, John Hazenstab

Increasing state occupational licensing has reduced upward income mobility

Increases in occupational licensing for moderate-income occupations from 1993 to 2012 are associated with reductions in absolute upward mobility, ranging from as low as 1.7% in Oklahoma to as much as a 6.7% reduction in Louisiana. On average, economic mobility declined by 3.5% as the number of low- and moderate-income occupations grew from 1993 to 2012.

Growth in occupational licensing over the 1993–2012 period has been widespread in the United States, with states on average increasing the number of low-income professions licensed by 31 over this 20-year period. Louisiana had the largest increase in the United States—59 newly licensed low-income occupations. Oklahoma and Kentucky on the other hand, experienced the lowest growth of only 15 newly licensed low-income occupations. Further examination of the states suggests that these disparities do not appear to be geographically related. In the South, Tennessee licensed 41 new low-income occupations, but bordering state Kentucky licensed only 15 occupations. In New England, Connecticut licensed 41 new low-income occupations and Vermont licensed just 18 new occupations.