Occupational Licensing, Antitrust, and Innovation

Every state has laws or regulations that require individuals seeking to offer a certain service to the public first to obtain approval from the state before they may operate in the state. Recent years have seen a significant proliferation of such laws, with less than 5% of jobs in the American economy requiring a license in the 1950’s to between 25-30% today. Although licensing in some occupations may benefit the public by reducing information asymmetry and/or ensuring a minimum quality level for a particular service, the significant growth in the number of occupations governed by some form of licensing requirements poses a potential threat to competition and consumer welfare. Our panel of experts discussed these important issues.

Occupational Licensing, Antitrust, and Innovation Panel

Patience Roggensack and Lisa Kimmel

While professional licensing can have an important role to play in protecting consumers, the proliferation of state occupational licensing regulations over the past fifty years raises important competition policy concerns.