Would it surprise you to know that 29 percent of the U.S. workforce has a job requiring a license, up from 5 percent in the 1950s? Would it further surprise you to know that the economic consensus is that licensing raises prices, restricts job opportunities from the less privileged, and offers little or no quality improvement in service rendered? And would it surprise you to know, lastly, that the ivory tower has essentially turned a blind eye to this research?
Let me recommend this tremendous and readable paper by E. Frank Stephenson and Erin E. Wendt in the May '09 EJW:
Consider the textbook by George Borjas. There are 11 pages covering the minimum wage. If he devoted pages in proportion to workers covered, then 11 pages on the minimum wage would correspond to 99 pages on licensing. Ehrenberg and Smith would give 72 pages to licensing. Hyclak, Johnes, and Thornton would give 135 pages to licensing. Instead, in each case, there is zero.
That this is terrible policy is hopefully self-evident. But are we surprised that its use is rampant? In a world where fear sells protectionism, not so much. In states that really care about fighting poverty, you will see lower licensing regulations.
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