Reducing Licensing Fees in Connecticut Benefits Workers and Consumers
Edward Timmons
Director, Knee Center for the Study of Occupational Regulation, West Virginia University
Senior Research Fellow, Archbridge Institute
Connecticut General Law Committee
February 7, 2023
Co-chairs Maroney and D Agostino and all distinguished members of the General Law
Committee:
Thank you for allowing me to testify regarding occupational licensing in Connecticut. I am an
associate professor of economics and director of the Knee Center for the Study of Occupational
Regulation at West Virginia University. I am also a senior research fellow with the Archbridge
Institute.
The main takeaways of my comments are the following:
1. Connecticut licenses more moderate income occupations (65 in total) than the average
state.
2. New licensing in Connecticut led to a 4.6% reduction in economic mobility and a 10.8%
increase in income inequality.
3. Fees are the hardest licensing restriction to justify from a consumer health and safety
perspective.
Occupational Licensing in Connecticut
Occupational licensing is the most stringent form of professional regulation. It forbids
Connecticut residents from working in a profession before meeting entry requirements including achieving minimum levels of education, passing exams, and paying fees to the state. Estimates suggest that more than 21 percent of workers in Connecticut are licensed—the 10th highest percentage in the country.(1) By erecting barriers to entering professions in the state, occupational licensing imposes a multitude of costs upon consumers and eliminates more than 48,000 jobs in the state each year.(2)
Focusing on lower income occupations, Connecticut is ranked 15th nationally with respect to the number of low incomes licensed and the associated costs with obtaining said licenses.(3) Average fees in Connecticut are $290 for the low income occupations that the state licenses.
The Costs and Benefits of Licensing Reform
According to my research, from 1993 to 2012, Connecticut added licensing requirements for 41 low income occupations.(4) This is 10 more than the national average and the highest number in New England. New York and Vermont, by contract, added less than half this number over the same period.
By making it more difficult for aspiring workers to begin working, additional licensing
requirements limited economic opportunity in the state. My research suggests that new licenses in Connecticut reduced economic mobility by 4.6% and increased income inequality by 10.7%.(5)
From a public safety standpoint, licensing fees are the hardest to justify. Capping licensing fees at a maximum level will help limit the costs of licensing on consumers and workers alike without jeopardizing public safety. I would urge policymakers in Connecticut to further scrutinize the costs and benefits of occupational licensing in the state.
1 Morris M. Kleiner and Evgeny S. Vorotnikov, At What Cost? State and National Estimates of the Economic Costs of Occupational Licensing (Arlington, VA: Institute for Justice, November 2018).
2 Kleiner and Vorotnikov, At What Cost?
3 Lisa Knepper et al., License to Work 3rd Edition (Arlington, VA: Institute for Justice, November 2022).
4 Edward Timmons et al., Too Much License: A Closer Look at Occupational Licensing and Economic Mobility
(Washington, D.C.: Archbridge Institute, April 2018).
5 Timmons et al., Too Much License.