Should local government require licenses for occupations?

Opinion. Wisconsin Moves to Rein in the Licensing Game
by: Luke Hilgemann
Oct 31, 2015
Click here to view the full article on WSJ.com

TOPICS: Labor Economics

SUMMARY: Barring municipalities from passing laws that discourage jobseekers and keep entrepreneurs out. "At first glance, occupational licenses might seem like small potatoes. But these regulations force jobseekers and entrepreneurs to acquire government approval before entering their chosen profession-a process that requires time, training, money or all of the above. Intended to ensure quality, occupational licenses are often little more than a barrier to employment that harms low-income communities the most."

CLASSROOM APPLICATION: Students can evaluate whether occupational licensing create barriers to entry into occupations and result in higher prices of services provided by licensed occupations. They can examine how economists would determine the occupations in which the benefits of licensing do not outweigh the costs.

QUESTIONS: 
1. (Introductory) What are the benefits of occupational licensing?

2. (Advanced) What is the effect of occupational licensing on the prices of services provided in industries with occupational licenses?

3. (Advanced) What is the effect of occupational licensing on the ability of workers to enter occupations?

Reviewed By: James Dearden, Lehigh University