Occupational licenses differ from professional association memberships, which often add an extra burden for those seeking to practice a profession in Puerto Rico. (Credit: Yee Xin Tan | Dreamstime.com)
More than 20 professions require both licensing and professional association membership.
Puerto Rico has more than 140 occupational licenses, 34 of which are required in fewer than five U.S. jurisdictions, including 13 that exist only on the island. This is revealed in the report “Unleashing Potential: The Burdens of Occupational Licensing and How They Can Be Reformed in Puerto Rico” published by the Institute for Economic Liberty (ILE, in Spanish).
The ILE study details the problems caused by excessive occupational regulation and proposes concrete actions for the government to address them.
Occupational licenses are state regulations that set requirements for individuals to practice a specific trade or profession. These requirements may include formal education or training, work experience, passing exams and payment of fees.
“The purported purpose of occupational licenses is to set minimum quality standards of occupational practice to protect public health and safety; however, empirical evidence has shown that occupational regulation does not guarantee high-quality service or yield significant benefits,” ILE stated.
Over time, occupational licenses have extended to jobs that pose no health or safety risks, becoming burdens for individuals, especially in low- and middle-income roles like automotive technicians, refrigeration apprentices, recreational leaders, shampooers, travel guides, condominium assistants, and electrical helpers, due to the cost, time, and effort needed to obtain them.
The ILE cited recent studies that have revealed that occupational licensing requirements have cost approximately 2.85 million jobs and more than $200 billion annually in price increases affecting consumers in the United States.
For this reason, occupational licensing reform has been a key public policy issue for the administrations of presidents Barack Obama, Donald Trump and Joe Biden, aimed at fostering job creation, increasing labor force participation and promoting economic development.
The authors of the ILE report are Ángel Carrión-Tavárez, director of Research and Public Policy at ILE; Dick M. Carpenter II, senior director of Strategic Research at the Institute for Justice; and Edward J. Timmons, associate professor of economics and director of the Knee Regulatory Research Center at West Virginia University.
“Puerto Rico has subordinated its economy to U.S. industrial policy and tax incentives instead of pursuing sustainable grassroots economic development beyond the shifting tides of federal policies,” said Carrión-Tavárez.
“Reforming occupational licensing is an action that policymakers in Puerto Rico can take to stimulate the kind of economic growth that generates prosperity opportunities driven by people’s industriousness,” he said.
The proposed actions include eliminating occupational licenses in Puerto Rico that do not protect public health and safety, reducing restrictions for individuals with criminal records, adopting universal recognition of U.S. licenses, aligning local licensing requirements with less burdensome equivalents, and limiting new licenses strictly to health and safety criteria.
“The right to earn an honest living is among the most important rights of free people. Yet, through occupational licensing — which is a government permission slip to work — the government in Puerto Rico imposes on that right, often unnecessarily,” said Carpenter.
“These licenses impose significant costs on consumers and aspiring workers, yet they rarely deliver the purported benefits. The widespread licensing in Puerto Rico desperately needs reform,” he said.
The ILE report, which was published in 2024, was released to address the pressing need to eliminate barriers that are limiting employment and economic development on the island.
“Puerto Rico is losing workers and rigid occupational licensing requirements are not helping. By removing unnecessary barriers to work and implementing the reforms we suggest in our Institute for Economic Liberty piece, Puerto Rico can take an important step forward toward economic recovery and prosperity,” said Timmons, whose studies on occupational regulation have been cited by the White House, Congress and the Federal Trade Commission. He has also provided expert testimony before state legislatures.
This article was published originally in NIMB.
