Report: License to Work

Ranking the States

IJ client Dr. Ben Burris is an Arkansas orthodontist who wants to offer low-cost teeth cleanings to people who cannot otherwise afford them. But it is illegal for him to perform basic dental services, even though he is a licensed dentist.

License to Work

The data and information here come from IJ’s License to Work report, released in November 2017.

As Table 6 shows, Louisiana licenses 71 of the 102 occupations studied—more than any other state.  It is followed closely by Arizona (64), California (62) and Oregon (59).  Wyoming, with a mere 24, licenses the fewest of those studied, followed by Vermont and Kentucky, which each license 27.  On average, states license 43 of the occupations studied.

However, when it comes to the burdens states impose on would-be workers, a different picture emerges.  For each state, Table 7 shows the average burdens imposed across all occupations licensed in that state. Table 7 also ranks states from most to least burdensome using a score created from these averages.  (See the methods appendix for details.)  The State Profiles section provides greater detail for each state, including the requirements for each licensed occupation.  As with the occupation rankings, the state rankings do not reflect any judgment about states’ licensing schemes; they merely compare them.

Hawaii tops the list as the most burdensome state, with an average of more than $360 in fees, 724 days—almost two years—in education and experience and two exams, as well as grade and age requirements for the 43 occupations it licenses.  Arkansas is not far behind, with an average of more than $200 in fees, 689 days, one exam and grade and age requirements for the 52 occupations it licenses.  Nevada, Florida and Arizona round out the top five most burdensome states.  In all, 14 states require more than a year of education and experience on average for the occupations they license.

The average state requires $203 in fees, 307 days (i.e., more than 10 months) in education and experience, one exam and grade and age minimums.

Pennsylvania is the least burdensome state, with a little more than $170 in fees, 113 days (i.e., 3.7 months) in education and experience, one exam and grade and age requirements.  Four states, Nebraska, Montana, Wisconsin and North Dakota, follow closely with similar burdens:  $107 to $209 in fees, four months or so of education and experience, one exam and grade and age requirements.

Taking into account the extent of licensing in the states, Table 8 ranks states according to a combined measure of burden and number of occupations licensed.  States that appear high on this list are those that license a large number of occupations and impose burdensome requirements.

By this measure, Arizona ranks at the top, with an average of $455 in fees, 599 days—more than one-and-a-half years—in education and experience and two exams, as well as grade and age requirements.  It also licenses 64 occupations.  California ranks a close second, costing its would-be workers an average of $300 in fees, 549 days in education and experience and one exam over the 62 occupations it licenses.

Seven of the top 10 most burdensome states listed in Table 7 remained in the top 10 in Table 8:  Arizona, Arkansas, California, Florida, Hawaii, Nevada and Oregon.  These states impose comparably heavy licensure burdens on their citizens; taking into account the number of occupations licensed merely changes their relative positions among the top 10 most burdensome states.

A handful of other states license relatively few occupations, but do so onerously.  They show up ranked high in Table 7 but substantially lower in Table 8.  Examples include Vermont (ninth most burdensome, but 44th combined), Oklahoma (11thmost burdensome, but 41st combined),  Kentucky (15th most burdensome, but 45th combined), Ohio (16th most burdensome, but 39th combined), Texas (17th most burdensome, but 32nd combined), Georgia (18th most burdensome, but 37th combined) and New York (19th most burdensome, but 40th combined).

Conversely, some states impose relatively light burdens, but license a large number of occupations, such as Mississippi (55 occupations, 45th most burdensome), Iowa (54 occupations, 46th most burdensome), Washington (54 occupations, 41stmost burdensome), Connecticut (54 occupations, 39th most burdensome) and Tennessee (53 occupations, 34th most burdensome).

Like the combined occupational rankings, Table 8 breaks the combined state rankings into tiers.  The combined scores of Tier 2 occupations are larger than average, while those of Tier 1 occupations are substantially so (more than one standard deviation larger).

Eight states—Arizona, California, Oregon, Nevada, Arkansas, Hawaii, Florida and Louisiana—make up Tier 1.  As shown in Table 9, these states require an average of $323 in fees, 542 days—almost a year and a half—in education and experience, one exam and age and grade requirements, and license an average of 56 occupations.

The exam, age and grade requirements are quite similar across state tiers, but this is not so for fees, education and experience and number of occupations licensed.  Tier 1 fees and education and experience requirements substantially outpace those in the other tiers.  In fact, someone seeking to work in a Tier 1 state would have to pay nearly twice the amount in fees and wait more than eight months longer to enter their chosen occupation than someone in a Tier 2 state.  And Tier 1 states license a greater number of occupations—six more than Tier 2, 17 more than Tier 3 and 27 more than Tier 4.

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