Economic Opportunity Across State Lines: Enhancing Occupational License Portability

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Moving to a new state can be daunting—packing, finding a new place to live, looking into options for schools, and finding the best local pizzeria. But if you’re one of the millions of Americans who need a license in order to work, the biggest hurdle could be getting a license in your new state. And it’s likely to involve more than just paperwork and fees. Because licensing requirements often vary from state to state, you might have to take additional courses or obtain specialized on-the-job experience—even if you’ve been working in the same profession for years. If your spouse is in the military, this is no news to you: barriers to employment are especially hard on military families, who face the financial and administrative burdens of applying for a new license each time they have to move across state lines.

Economic Liberty opens doors.Next month, the FTC’s Economic Liberty Task Force will host its first public event to explore efforts underway to reduce the burden of state-specific occupational licensing. At a roundtable in Washington, D.C. on July 27, we will bring together experts to discuss options for streamlining licensing across state lines, such as reciprocity and license portability.

In some professions, state licensing requirements protect public health and safety, which benefits consumers and serves important state policy interests. But when licensing requirements vary from state to state, those requirements impose barriers to entry that restrict the labor supply and reduce competition, even when there may be no legitimate justification for each state to impose different requirements. When this happens, licensing may unnecessarily limit a worker’s ability to move freely without incurring significant costs and delays in getting back to work after a move. State-by-state licensing may also make it difficult for people to work in multiple states.

Moreover, licensing rules impose costs on all consumers, not just the people who work in licensed occupations, because they restrict the supply of qualified workers even in the face of unmet demand. For this reason, state-specific licensing can, in some circumstances, limit consumer access to services and increase the prices they pay. For example, when an otherwise qualified service provider is licensed in one state but not another, that provider may not be able to offer services even though there is a shortage in the other state. The state-by-state nature of licensing may also prevent qualified service providers from addressing time-sensitive emergencies across a nearby state line. It might limit the ability of a health care provider to supply telehealth services to consumers in rural and underserved locations. This problem can arise anytime demand for services exceeds the supply of licensed workers.

Fortunately, many organizations are working on solutions that would enhance occupational license portability and make it easier for licensees to work in multiple states. The July 27 roundtable will bring together experts to discuss:

  • Barriers to entry created by state-specific occupational licensing requirements
  • License portability strategies
  • The status and effectiveness of interstate licensing compacts, agreements, and model laws intended to ease licensing requirements across state lines for specific professions
  • State-based initiatives to improve the portability of licenses held by military service members and their spouses, and how these experiences may inform civilian license portability efforts
  • The potential impact of portability measures on licensee mobility, market entry, provider supply, and competition among service providers

The roundtable will start at 2:00 pm, with Acting Chairman Ohlhausen delivering opening remarks. The event will be webcast live from the FTC’s event web page. Additionally, we encourage interested parties to submit comments online (include the words “License Portability” in the subject line).

Check out the detailed roundtable announcement and agenda for more information on topics of discussion and panelists. Watch for updates on Twitter @FTC using the hashtag #EconLibertyFTC, including live tweeting on the day of the roundtable.

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