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Testimony Before the Subcommittee on Antitrust, Competition Policy and Consumer Rights Jason Furman Chairman, Council of Economic Advisers February 2, 2016 The Share of Workers Licensed at the State Level Has Risen Five-Fold Since the 1950s Figure 1 Share of Workers with a State Occupational License Percent of the Workforce 28 24 20 16 12 8 4 0 1950s 1960s 1970s 1980s 1990s 2000 2008 Source: The Council of State Governments (1952); Greene (1969); Kleiner (1990); Kleiner (2006); and Kleiner and Krueger (2013), Westat data; CEA Calculations. 1 Around Two-Thirds of the Increase in Licensing Is Driven by More Professions Being Licensed Figure 2 Percent Licensed Over Time: Estimated and Counterfactual Percent of the Workforce 35 Estimate Licensed at the State Level 30 25 Holding Constant Fraction Licensed by Occupation 20 15 10 5 0 1965 1970 1975 1980 1985 1990 1995 2000 2005 Source: Kleiner and Krueger (2013), Westat data; Bureau of Labor Statistics; Current Population Survey. Note: To make the adjustment, we use Kleiner and Krueger’s estimates of the shares of State-licensed workers in each occupation in 2008, and adjust for changes in occupational mix back to 1968, taking advantage of a historically consistent occupational classification system in the Integrated Public Use Microdata Series version of the Current Population Survey. Licensing Has Expanded into New Sectors Figure 3 Share of All Licensed Workers in the 12 Occupations with the Most Licensed Workers Health Care Practitioners Education Transportation Sales Management Construction Personal care Protective Service Health Care Support Installation and Maintenance Business and Financial Production 0 3 6 9 12 15 18 Occupation's Share of All Licensed Workers (Percent) Source: Kleiner and Krueger (2013) Westat data; Current Population Survey Outgoing Rotation Group; CEA calculations. Licensing Is Very Uneven Across States Figure 4 Source: 2013 Harris Poll Interactive survey, reported in Kleiner and Vorotnikov (2013) and Kleiner (2015). 4 States Also Differ in the Requirements for their Licenses Figure 5 Source: Institute for Justice analysis, reported in Carpenter (2012). 5 Licensing Decreases Mobility Across State Lines Figure 6 Difference in Migration Rates of Workers in Most vs. Least Licensed Occupations Percent Difference 0.0 -5.0 -10.0 Between State -15.0 Within State -20.0 -25.0 All Under Age 35 Age 35 or Older Source: Census Bureau, American Community Survey 2010-2013; CEA Calculations. Note: Number is calculated from an OLS regression controlling for race, citizenship, sex, citizenship, number of children, marital status, education, income, year, and state. Ages 25 to 65 were included. Only Some States Have General Standards Governing the Relevance of Conviction Records Figure 7 Source: National Association of Criminal Defense Lawyers; Legal Action Center; UST and CEA tabulations. Only Some States Have Sunrise and Sunset Review Processes for Licensing Laws Figure 8 Source: Council on Licensure, Enforcement, and Regulation (2015). Testimony Before the Subcommittee on Antitrust, Competition Policy and Consumer Rights Jason Furman Chairman, Council of Economic Advisers February 2, 2016