Occupational licensing

Occupational licensing, also called occupational licensure, is a form of government regulation requiring a license to pursue a particular profession or vocation for compensation. It is related to occupational closure. Professions that can have a large negative effect on individuals, like physicians, public accountants, and lawyers, require occupational licenses in most developed countries, but many jurisdictions also require licenses for professions without that possibility, like plumbers, taxi drivers, and electricians. Licensing creates a regulatory barrier to entry into licensed occupations, and this results in higher income for those with licenses and usually higher costs for consumers.

Licensing advocates argue that it protects the public interest by keeping incompetent and unscrupulous individuals from working with the public. However, there is little evidence that it affects the overall quality of services provided to customers by members of the regulated occupation.[1] A 1983 study found that some occupational licensing schemes tended to exclude minorities and disadvantaged populations from entering such trades.[2] However, a more recent study from 2009 found the opposite.[3]


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