April, 2021

Occupational Licensing

A Barrier to Opportunity and Prosperity
  • Alicia Plemmons

    Assistant Professor and CAS Undergraduate Economics Program Director, Southern Illinois University Edwardsville
  • Edward Timmons

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Read the chapter here.

Alicia Plemmons and Edward Timmons provide a more detailed introduction to occupational licensing, expounding on the research addressing the expansion of such regulations since the early 20th century. Support for occupational licensing has its roots in protect- ing and promoting individual liberty; licensing therefore should not necessarily be viewed as bad policy. Plemmons and Timmons’s analysis is consistent with arguments made by Christopher Tiedeman, the 19th-century classical liberal author and student of constitutional law: the legitimate purpose of licensing is to limit the frequency of injurious trade by restricting from the market incompetent traders who seek to defraud consumers. 

Plemmons and Timmons show that the number of occupations requiring licenses and the stringency of the requirements for obtaining these licenses has expanded dramatically in recent years. The authors explore the effects of occupational licensing on numerous economic measures: occupational choice, job mobility, wages, consumer access, and product or service quality, to name a handful. While some of the research findings highlighted by Plemmons and Timmons support that occupational licensing is associated with improved service quality select industries, the consensus in the relevant literature suggests that the growth in licensing almost certainly extends beyond the legitimate purpose described by Tiedeman.