Edward Timmons proposes revising occupational licensing requirements to encourage access to jobs.
In Puerto Rico, at least 13 occupations are identified as requiring licensing only on the Island, while in the U.S. no similar obligation exists, writes Edward Timmons. (Shutterstock)
Puerto Rico needs more workers and real licensing reform can help. The island lags behind the mainland in labor force participation—just 45% of citizens are working or actively seeking work. This is almost 20 percentage points lower than the U.S. average.
Puerto Rico cannot afford to maintain unnecessary regulations that make it harder for individuals to work. Yet that is precisely what occupational licensing laws do. Occupational licensing laws make it illegal for individuals to work without meeting minimum entry requirements, which typically include education and training standards, passing exams, and paying fees. While there are sometimes good arguments for occupational licensing, it is often used to restrict competition and protect established professionals.
By making it more costly for hard working Puerto Ricans to start a new job, it might discourage them from seeking employment. Economic research confirms this hypothesis: two published studies have found that restrictive occupational licensing reduces the supply of workers by more than 25%.
In a recent report that I coauthored with Dr. Ángel Carrión-Tavárez and Dr. Dick M. Carpenter II, we identified 13 examples of occupations that are uniquely licensed in Puerto Rico. If no other U.S. state licenses a particular occupation, it is difficult to justify why Puerto Rico should.
It is also important to highlight that occupational licensing is not the only way to regulate professions and ensure public safety. More flexible and cost-effective alternatives exist. Private certification, for example, is an excellent way to provide consumers with the information they need to choose service providers. The market itself is also an excellent regulator. Providers of poor-quality service will not be in business for very long—information about the reputation of providers is easily accessible in the palm of our hands using a smartphone.
Thankfully policymakers in San Juan are considering legislation that could help—but there is still much room for improvement. Law No. 3-2025 helps Puerto Rican citizens seeking rehabilitation for past mistakes by making it easier for them to obtain a license. Gainful employment is widely recognized as one of the most effective ways to reenter civil society. Law No. 3-2025 provides this pathway for licenses issued by the Department of Health and Department of State but excludes more than 40 other occupational licenses issued by other Departments. The reform would be more impactful if all departments were included.
Bill 6 addresses one of the most difficult problems created by occupational licensing by making it easier for a Puerto Rican living in the U.S. to transfer their license to Puerto Rico. If a skilled doctor or nurse moves to the Island, they will not be able to work immediately. Instead, they may face long delays in transferring their U.S. license—or worse, be required to complete additional education or training. This doesn’t make sense—especially when Puerto Rico needs more healthcare professionals and skilled workers. Today, 28 states have passed similar reforms. I would argue that Bill 6 doesn't go far enough, as it places too much emphasis on education and training that skilled workers may have completed decades ago—instead of focusing on their current scope of practice and real-world experience. Eighteen U.S. states now use this more practical approach.
Bill 275 would eliminate several of the unique occupations licensed in Puerto Rico. This would be a step in the right direction, but Puerto Rico also has many other licenses that are rarely encountered in the U.S. mainland. Eliminating unnecessary occupational licensing requirements will not jeopardize public safety. Instead, this reform can improve labor force participation and increase competition, giving consumers more choice and potentially better-quality services.
To begin the pathway to prosperity, Puerto Rico must welcome new workers—not hinder them. The Island simply cannot afford to maintain unnecessary barriers that prevent people from earning an honest living. Policymakers are taking good first steps, but bolder reform is needed. Our report lays the groundwork for real and impactful reform that can help improve the lives of all Puerto Ricans.
Dr. Edward Timmons is a service associate professor of economics and founding director of the Knee Regulatory Research Center at West Virginia University. He is also a senior fellow with the Archbridge Institute.
A shorter version of this column was originally published in Spanish El Nuevo Día.
