Summary of Occupational Licensing and the American Worker

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The US Bureau of Labor Statistics reports that almost 25% of employed Americans in 2015 required licenses to work in their chosen occupations, up from 5% in the 1950s. In this fresh look at the US labor market, economist Ryan Nunn reports on the scope and impacts of licensing, a requirement with both negative and positive implications for individuals and the overall economy. getAbstract suggests this instructive article to employers, employees, and those looking to understand how licensing shapes the US workplace and the economy.

About the Author

Ryan Nunn is a policy director with the Hamilton Project at the Brookings Institution.

 

Summary

In the United States, workers need to hold a license to engage in many types of employment. Occupational licenses – which governments, usually at the state level, issue – confer “legal permission” to work in a particular field. Requirements for job licensing are rising in industries as disparate as landscaping, health care and financial services. Indeed, the proportion of US workers who hold licenses increased fivefold from the 1950s to 2015. Licensing plays a critical role in shaping the labor market by setting wages, erecting barriers to entry, and affecting employment opportunities, labor...


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