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Conor Norris and Edward Timmins: Shapiro’s licensing reforms deserve our attention this election season
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Conor Norris and Edward Timmins: Shapiro’s licensing reforms deserve our attention this election season

As we near the finish line of the 2024 election, Pennsylvania appears to be the top priority for Vice President Kamala Harris and former President Donald Trump. Whoever wins this state will most likely also win the election and thus become the next president of the United States.

While all the attention is focused on the elections, some important reforms in the Keystone State are going unnoticed.

First, the Shapiro administration focused on reduce license processing time. These delays can keep skilled workers on the sidelines, costing them time and money. This also means that consumers have fewer choices in the market. Second, a difficult-to-justify license has been removed. HB 1820 was signed by Governor Josh Shapiro – eliminating a 300 hour delay training requirement for aspiring hair braiders.

Why are these reforms important? Should we worry that Pennsylvanians will now be less safe? Most of the time, it’s easy to know if what you’re buying is good enough. We can rely on friends, recommendations or even our own past experience.

But some services are different. As consumers, we cannot be sure that the service is good before we buy. For someone mowing your lawn, this isn’t a big deal. But sometimes it can cause serious damage. Licensing laws attempt to address this problem in two ways.

First, before an aspiring professional can practice, he or she must apply for a license from a board of professionals. To obtain the license, they must meet education requirements, receive hands-on training, and pass exams.

Second, licensing boards supervise practicing professionals. Those who fail to meet professional standards may be punished or even have their license revoked and lose their ability to practice.

It may seem that licenses are a good thing and that they protect us. Unfortunately, licensing laws work much better in theory than in practice. Economists I can’t find any proof that licensing laws improve the quality of services consumers receive. In fact, only four of 22 studies that test the effect of licensing on quality conclude that licensing leads to improvement.

Even if licensing requirements themselves fail to protect consumers, oversight by a board of expert professionals surely will, right? Unfortunately, the evidence says otherwise. Thanks to an Idaho executive order in 2017, we have detailed descriptions of disciplinary actions taken by some of their licensing boards over five years. Our analysis shows that these boards are just as likely to enforce procedural requirements – often unrelated to service quality – as they are to remedy actual quality violations. And any disciplinary action, whether quality-related or not, was rare.

Licenses may not protect consumers, but they protect professionals from competition. Access conditions, which should improve quality for consumers, also make access to the profession more difficult. This has a tangible effect on people’s decision to enter a licensed profession. In general, licensing laws reduce the number of licensed professionals by 25%.

Consumers may not get better services from licensed professionals, but they pay higher price. This is because when we limit the number of professionals in a field, they can charge consumers more. Successful professionals earn more, but not by providing better services. They benefit from completely excluding people from the profession.

Based on the facts, what should states do? First, they must contain the damage and not create new licenses. Every year, a plethora of licensing bills appear in states across the country. Second, states can reduce burdensome licensing requirements, to mitigate the negative effects of licensing. When licenses are not necessary, states should eliminate them in favor of a competitive market or more targeted, more effective, and less costly regulations to protect consumers.

The Shapiro administration deserves credit for recognizing the costs of professional licensure and moving forward with reform. There is still much to be done, but Keystone State lawmakers and the executive branch are taking important steps to eliminate unnecessary barriers for workers.

Conor Norris is the assistant director and Edward Timmons is the director of Knee Center for the Study of Professional Regulations at West Virginia University. Timmons is also a principal investigator at Arch bridge Institute.

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