Unnecessary regulation headaches for workers, business worst in these states
Occupational licensing — regulations that require training and state-issued certification to practice certain trades — has seen massive growth in recent decades. While there’s certainly a role for government licensing — especially for high-risk and life-saving occupations — more and more research suggests that licensing rules are overextended.
My own research, recently produced with the Center for Growth and Opportunity at Utah State University, confirms another fact about licensing: because different states have different rules and fees for those applying to get licenses, those laws can have a significant impact on who — and how many people — businesses choose to hire.
For example, Alabama charges around $235 to become a cosmetologist while its neighboring Florida requires only $90 — two and a half times less for what is essentially the same license. The data suggest that states with higher licensing costs like Alabama see fewer businesses start than states without those added hurdles. This means that firms and small businesses who pay to license employees are less likely to do business in an expensive state if a substantially cheaper state is within a short distance.