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Researchers at West Virginia University have put together a database that shows what most of us already know -- that hundreds upon hundreds of occupations for which practitioners are required to get a license are hampered by the subsequent professional obstacles and necessary price hikes those licenses create.
The WVU Knee Regulatory Research Center at the John Chambers College of Business and Economics had a paper published in The Journal of Entrepreneurship and Public Policy that introduces the database as a way to look at how occupational licensing impacts the workforce. The database includes state regulations for each state on 50 jobs -- everything from a nuclear medicine technician to a shampoo assistant.
"We have stronger evidence that licensing reduces the supply of professionals than that it ensures quality," said Assistant Director Conor Norris. "Professional licenses increase the cost and time to enter a licensed profession. As a result, consumers pay higher prices. …"
According to WVU, 22% of workers in the U.S. are licensed. That is an increase from just 5% in the 1950s.
According to Norris, results are mixed as to whether all that licensing actually leads to improved service and consumer safety. The database should be an important tool for politicians and policymakers looking to make good decisions. Licensing requirements has been a topic of discussion in the West Virginia Legislature in recent years.
"Our data not only catalogs specific licensing requirements, it exposes their effects," said Research Center Director Edward Timmons. "We can now estimate, for instance, if licensing fees restrict the supply of workers. We can estimate the effect of education requirements and exams on the quality of professionals and their services. And citizenship requirements and English language proficiency are especially useful for understanding licensing's effect on immigrants."
This is not to say that your physical therapist shouldn't be licensed, or your physician. But should a shampoo assistant at a salon be required to be licensed?
As West Virginia continues to figure out state government's role in the expansion and diversification of our economy, it is encouraging to know such work shows when government should help and when it should get out of the way.