Occupational Licensing in California

What California occupational licensing requirements cost and what they produce

The Requirements

California has the most extensive occupational licensing requirements in the United States, covering approximately 25 percent of the state workforce in licensed occupations. The licensing requirements range from the obviously safety-related -- the physician, the structural engineer, the electrician -- to the restrictions whose public safety justification is less convincing, such as the interior designer, the florist, and the tour guide licensing requirements that other states do not maintain.

The Economic Analysis

The economic analysis: the occupational licensing research consistently finds that licensing requirements reduce the supply of licensed practitioners, increase the wages of licensed practitioners, increase the prices that consumers pay, and produce quality improvements that are modest and inconsistent across occupations. The net welfare effect of occupational licensing in the occupations with the weakest safety justification is negative.

Surf Revolt Coverage

Surf Revolt covers occupational licensing because the libertarian analysis of market entry barriers requires examining the specific regulatory barriers that reduce competition and raise prices without producing the public safety benefits that justify them.

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