Population Spotlight | Occupational Licensing

9/5/2017

Overview

Occupational licensing can create barriers to entering the labor market for all workers, but certain populations are disproportiantely affected by these policies including military families, immigrants with work authorization, people with criminal records and unemployed or dislocated workers.

Licensed occupations are those that require individuals to meet certain requirements in order to practice a profession. Since the 1950s, the number of occupations requiring licensure has steadily grown and now accounts for more than 25 percent of all employed Americans. Originally intended to protect the health and safety of consumers, occupational licensing laws have created a complex patchwork of requirements as each state has developed their own guidelines for a growing number of occupations. Some populations of workers find the economic barriers created by occupational licensure requirements and the lack of licensure portability between states particularly difficult to overcome. 

Occupational Licensing: Examining Challenges for Four Subpopulations

Skilled Immigrants

States have begun taking actions to reduce licensing barriers for immigrants who are authorized to work in the U.S. The reasons vary, from filling state labor shortages and retaining skilled immigrants to capitalizing on underutilized immigrant talent.

Among highly skilled immigrants, 1-in-4—2 million people—are either unemployed or underemployed despite having years of education and experience, according to the Migration Policy Institute. Barriers include difficulty in obtaining recognition for foreign education or credentials, limited English language proficiency, unfamiliarity with the US labor market and licensing requirements, and programs to address skills deficits for job opportunities in the United States.

State efforts, through licensing, credentialing, streamlining or clarifying application processes can result in increased income, spending, and tax revenues from better-paying jobs.  

NCSL Resources Concerning Licensing Barriers for Skilled Immigrants

NCSL Contact: Ann Morse, ann.morse@ncsl.org 

People With Criminal Records

Criminal conviction records can be a barrier to ex-offenders finding and maintaining a meaningful job, which is a critical aspect of their successful reintegration into communities.

The National Inventory of the Collateral Consequences of Conviction currently identifies over 16,000 restrictions on state occupational licenses and certifications for ex-offenders. To support reintegration, some states have adopted policies that encourage employment opportunities for ex-offenders, including for professional licensing. For example, a Connecticut law declares that, “the ability of returned offenders to find meaningful employment is directly related to their normal functioning in the community,” and therefore prohibits denial of a professional license based solely on a prior conviction.

At least 31 states limit or prohibit the use of criminal records in employment for licensing eligibility, according to the Collateral Consequences Resource Center

NCSL Resources Concerning Employment Licensing for Ex-Offenders

NCSL Contact: Rich Williams, richard.williams@ncsl.org

Active Duty Military, Veterans and their Spouses

Military family with childThe U.S. and its territories are home to more than 20 million veterans. These men and women offer a unique set of skills, experiences and leadership abilities, yet many struggle to find a position in the civilian workforce. Though down from the high in 2011 (12.1 percent), the unemployment rate for veterans who served after September 2001 is still higher than that of non-veterans. Skills translation, self-marketing and negative stereotypes all play a role, as do the requirements for professional licenses and certifications. Veterans may have difficulty obtaining a civilian credential despite years of transferable military education, training and experience. This is also a problem for military spouses who need to transfer a professional license after a move to another state. Though almost all states have enacted legislation to help veterans and military spouses, barriers to the labor market still exist for this population.

NCSL Resources on the Employment of Active Duty Military, Veterans and Their Spouses

NCSL Contact: Jennifer Schultz, jennifer.schultz@ncsl.org

Unemployed and Dislocated Workers

Occupational licensure requirements can be particularly burdensome economic barriers for low-income, unemployed and dislocated Americans. Unemployed or dislocated workers may lack the resources needed to pay for the required education and training as well as licensing fees, license renewal fees and other associated costs necessary to secure a license.

A 2012 report from the Institute for Justice found that, on average, becoming a licensed worker takes nine months of education or training, a passing score on an exam, and payment of more than $200 in fees. In many states, requirements far outpace the average. According to Veronique de Rugy of George Mason University’s Mercatus Center, ‘[b]y placing barriers to entry on jobs that could otherwise be performed by low-income individuals, these states remove the bottom rung of the ladder of opportunity for the citizens who need it most.”

To address these issues, states are beginning to take stock of their own occupational licensing laws and make policy changes to reduce burdensome licensure requirements, eliminate unnecessary barriers to labor market entry and improve portability of licenses across state lines.

NCSL Resources on Unemployed and Dislocated Workers

NCSL Contact: Joellen Kralik, joellen.kralik@ncsl.org 

Additional Resources