By state laws, workers in certain fields must have a license. Licensing is intended to ensure that only competent and ethical individuals practice in an occupation. Most licenses are authorized by state government and give an individual the right to practice that field.

Why are licensing requirements necessary?

Importance of Licensure. Professional licensure protects the public by enforcing standards that restrict practice to qualified individuals who have met specific qualifications in education, work experience, and exams.

What is the point of licensing?

Licensing involves obtaining permission from a company (licensor) to manufacture and sell one or more of its products within a defined market area. The company that obtains these rights (the licensee) usually agrees to pay a royalty fee to the original owner.

What careers are considered professionals?

Professional jobs include:

• teachers.
• doctors/surgeons/dentists.
• accountants.
• lawyers.
• engineers.
• architects.
• artists/authors.
• designers.

How does occupational licensing protect consumers?

Licensing is one method governments use to regulate traders when there is a high risk of consumer detriment. They, therefore, reduce one of the greatest potential costs of licensing, restricting entry into the industry and reducing consumer choice.

Which level of government can issue professional licenses?

state governments
In the United States, the state governments have jurisdiction for issuing most professional licenses to individuals and corporations. In areas that naturally cross states’ borders, the national government may be the issuer.

Why are there so many jobs that require a license?

Critics of licensing, however, note that professional associations lobby for occupational licensing out of self-interest, to restrict competition and increase earnings. They say that, instead of serving the public good, licensing harms consumers by restricting access to professional services.

What does it mean to have occupational license?

A license is a credential that a local, state, or federal government requires a worker to hold to practice in a given occupation. Typically, licenses are required by state governments. Some occupations are universally licensed – think doctors and lawyers – but many occupations are licensed only in certain states.

How many people have occupational license in US?

In the 1950s, approximately 5% of U.S. workers had an occupational license, meaning they completed additional schooling or training (and paid the necessary fees) and passed an exam to be licensed to practice the profession in a certain state. Today, the Bureau of Labor Statistics estimates that 23% of full-time workers have a license.

What are the economic implications of occupational licensing?

Using the newly released Bureau of Labor Statistics data, it is possible to describe licensed workers and then examine a number of important economic implications of licensing. Licensing varies substantially by occupation. Legal, education, and healthcare occupations feature licensing at particularly high rates, as shown in Figure 1.