State Occupational Licensing Index 2023

2023 State Occupational Licensing Index, Archbridge Institute

Occupational licensing affects more than 20 percent of workers in the United States. The extent of occupational licensing greatly differs across states. From both a research and public policy standpoint, it is important to have a comprehensive measure of occupational licensure across states and occupations.

The purpose of the State Occupational Licensing Index (SOLI) is to help fill in this gap. The report contains four main sections: an introduction to the index, an overview of our methodology, a comparison to other database rankings, and state profiles for all 50 US states plus DC.

Each state profile features the overall U.S. rank, a regional comparison, the total barriers to entry and barrier score, the total number of licenses and license score, and the state’s most uniquely licensed occupation. This information provides useful insights for researchers and the public policy community.

In 2023, the state with the highest occupational licensing burden is Arkansas (#1), followed by Texas (#2), Alabama (#3), Oklahoma (#4), and Washington (#5); the state with the lowest occupational licensing burden is Kansas (#51), preceded by Missouri (#50), Wyoming (#49), Indiana (#48), and Colorado (#47).

Our goal is to inform the national debate regarding occupational licensing reform by providing a new measure of the extent of licensing, which affects more than one in five workers nationally. This is more than double the fraction of workers who belong to a union, and more than 10 times the fraction of workers who receive the minimum wage. Our hope is that this new index will also lead to new research projects on the effects of occupational licensing. States nationally are struggling with a skilled worker shortage. Licensing erects barriers to entering many of these skilled trades and is making these shortages worse than what they should be.

This release is our first step towards a comprehensive, comparable measure of such a widely variable topic that is occupational licensing. Licensing not only affects economic mobility, since licenses are often a barrier to jobs with higher wages; it also affects physical mobility, because having to obtain an occupational license in a new state can affect a worker’s move decision.

You can access the 2023 State Occupational Licensing Index in pdf. All information, including the data, regarding the index can be accessed here.

This piece was originally published in the Archbridge Institute.

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