How Occupational Licensing Hurts the Poor and Holds Back Growth in America and Around the World
Occupational licensing hurts the poor and holds back growth in America and around the world.
Occupational licensing is often framed as a neutral tool for protecting consumers. In reality, it is one of the most direct ways governments limit who can work, and those limits fall hardest on the poor. When entry into a job requires time, money, exams, and bureaucratic approval, the burden is not evenly shared. It is often the poor whose occupations who are disproportionately licensed and therefore are hindered from working in jobs they are otherwise qualified to do.
A new cross country study I wrote with Morris Kleiner, “Analyzing Occupational Licensing Across Nations” (now in the NBER Working Papers Series), shows just how widespread this problem has become internationally. Using surveys across many countries, we found that roughly one-fifth to one-quarter of workers are in jobs that require a government license. That is not just an advanced economy phenomenon; it’s global and arguably prevents many poorer countries and their inhabitants from rising.
Read the full article from The Foundation for Research on Equal Opportunity.
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