Licensing creep

The Institute for Justice, an American libertarian think tank that focuses on legal issues, has just released a superb report on occupational licensure. Charting how many occupations require state permission in each state, the most striking result is how regulated low-skilled parts of the market are, and how high the barriers are. 

On average among the 102 professions surveyed, government licenses require applicants to "spend nine months in education or training, pass one exam and pay more than $200 in fees. One third of the licenses take more than one year to earn. At least one exam is required for 79 of the occupations."

The most likely explanation is that licensed professions have successfully lobbied the government to restrict access to the market to inhibit competition. It might inititally seem more outrageous that manicurists are more heavily regulated than pre-school teachers, but this might be a blessing in disguise.

As David Friedman has written, the likely outcome of licensing professions is lower quality and higher prices. To paraphrase Friedman: Regulate manicurists, and we'll presumably have longer nails. Regulate pre-school teachers, and we'll presumably have more ignorant children.