I do research on occupational licensing, and when I ask people to guess the state with the heaviest licensing burden, they often name New York first. They’re usually shocked when I tell them that New York is actually a model state in this regard, compared with most others. Their surprise is understandable, given New York’s well-earned reputation for onerous and often counterproductive regulation in many other areas. And yet, in this key sector, the state is performing well—and that’s welcome news, because requiring licensing for an occupation reduces the supply of practitioners in it by as much as 27 percent.
In a recent study conducted for the Archbridge Institute, the State Occupational Licensing Index (SOLI) 2024, Edward Timmons, Sebastian Anastasi, and I found that New York has the nation’s fifth-lightest occupational licensing burden. Our index considers 284 commonly licensed occupational titles and ranks states by whether one needs any form of license to do that job (barriers) and by whether that state has a specific license for that occupation (licenses). This methodology provides a simple way of keeping track of a state’s propensity to create obstacles to job entry through this kind of regulation. The “barriers” measure is meant to note cases in which one license may bar entry into many occupational titles; for example, one state may have an “electrician” license, while another may have ones for “high voltage electrician,” “low voltage electrician,” and “residential electrician.” The SOLI accounts for the differences in these two states by classifying the first as a state with three barriers and one license, and the second as a state with three barriers and three licenses.
New York does well overall, with a total of 148 barriers and 131 licenses. For comparison, Texas (another surprise, given that state’s generally business-friendly environment) has both the most barriers and the most licenses overall: 199 and 163, respectively. The national averages are 174 and 133. The only states performing better than New York, according to the index, are Indiana, Wyoming, Missouri, and Kansas. These findings are corroborated by License to Work, an index on licensing barriers to low-income occupations, in which New York ranks 16th-best overall. Since 2017, New York has not added any new licenses in the 102 occupations License to Work monitors. Given both measures, it’s clear that New York is performing relatively well overall in keeping occupational licensing barriers low, though there is room for improvement in lower-income occupations.
Continue reading at City Journal.
Noah Trudeau, PhD, is a research fellow at the Archbridge Institute and lead author of the institute’s “State Occupational Licensing Index” project. He is also an assistant professor of data analytics at Troy University and a research affiliate with the Knee Regulatory Research Center at West Virginia University. Follow his work @EconTrudeau.
Economics of Flourishing
I do research on occupational licensing, and when I ask people to guess the state with the heaviest licensing burden, they often name New York first. They’re usually shocked when I tell them that New York is actually a model state in this regard, compared with most others. Their surprise is understandable, given New York’s well-earned reputation for onerous and often counterproductive regulation in many other areas. And yet, in this key sector, the state is performing well—and that’s welcome news, because requiring licensing for an occupation reduces the supply of practitioners in it by as much as 27 percent.
In a recent study conducted for the Archbridge Institute, the State Occupational Licensing Index (SOLI) 2024, Edward Timmons, Sebastian Anastasi, and I found that New York has the nation’s fifth-lightest occupational licensing burden. Our index considers 284 commonly licensed occupational titles and ranks states by whether one needs any form of license to do that job (barriers) and by whether that state has a specific license for that occupation (licenses). This methodology provides a simple way of keeping track of a state’s propensity to create obstacles to job entry through this kind of regulation. The “barriers” measure is meant to note cases in which one license may bar entry into many occupational titles; for example, one state may have an “electrician” license, while another may have ones for “high voltage electrician,” “low voltage electrician,” and “residential electrician.” The SOLI accounts for the differences in these two states by classifying the first as a state with three barriers and one license, and the second as a state with three barriers and three licenses.
New York does well overall, with a total of 148 barriers and 131 licenses. For comparison, Texas (another surprise, given that state’s generally business-friendly environment) has both the most barriers and the most licenses overall: 199 and 163, respectively. The national averages are 174 and 133. The only states performing better than New York, according to the index, are Indiana, Wyoming, Missouri, and Kansas. These findings are corroborated by License to Work, an index on licensing barriers to low-income occupations, in which New York ranks 16th-best overall. Since 2017, New York has not added any new licenses in the 102 occupations License to Work monitors. Given both measures, it’s clear that New York is performing relatively well overall in keeping occupational licensing barriers low, though there is room for improvement in lower-income occupations.
Continue reading at City Journal.
Noah Trudeau
Noah Trudeau, PhD, is a research fellow at the Archbridge Institute and lead author of the institute’s “State Occupational Licensing Index” project. He is also an assistant professor of data analytics at Troy University and a research affiliate with the Knee Regulatory Research Center at West Virginia University. Follow his work @EconTrudeau.
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