A Snapshot of Occupational Licensing in Idaho
November 20, 2023
A Snapshot of Occupational Licensing in Connecticut
November 27, 2023
A Snapshot of Occupational Licensing in Michigan
Edward Timmons1, Conor Norris1, and Noah Trudeau1,2
1: Knee Center for the Study of Occupational Regulation, West Virginia University
2: Troy University, Alabama
Occupational licensing makes it illegal to work in an occupation before meeting state-mandated entry requirements that often include minimum levels of education and training, paying fees to the state, and passing exams. Nationally, 21% of workers are licensed.[1]
Licensing requirements for the same profession vary significantly across states. The 2023 State Occupational Licensing Index (SOLI) ranks states by the number of occupations that are licensed.[2] The SOLI database focuses on 331 occupations that are available in the Knee Center licensing database.[3]
Michigan’s SOLI ranking
In the 2023 SOLI, Michigan ranks 29th nationally (with 1st being the most burdensome). Michigan makes it illegal to work in 178 of the 331 occupations examined. This is 1 less occupation than the national average of 179, but more than 30 more than Kansas—the state with the fewest legal barriers (147) to working nationally.
Uniquely licensed occupations in Michigan
Among the 178 occupations that Michigan establishes minimum entry requirements to begin working, there are 10 occupations that are licensed in 20 states or fewer nationally. Table 1 provides a full list of these occupations and there is also a separate excel file with full details for interested readers.
Michigan is one of only 3 states to issue a separate license for electrical sign contractors. Michigan is also one of only 8 states to license natural hair braider teachers and one of 15 to license foresters.
Table 1: Uniquely licensed occupations in Michigan
| Occupation | Total States |
| Electrical Sign Contractor | 3 |
| Home Improvement Salesperson | 5 |
| Manicurist Apprentice | 6 |
| Natural Hair Braider Teacher | 8 |
| Septic System Servicer | 8 |
| Home Improvement Contractor | 9 |
| License Piping Contractor | 11 |
| Certified Real Estate Evaluator | 15 |
| Forester | 15 |
| Polygraph Examiner Intern/Trainee | 17 |
Sources: State Occupational Licensing Index 2023 Master File and Knee Center Occupational Licensing Database.
Why Licensing Reform is Important
By making it illegal to work in 178 occupations, and uniquely licensing at least 10 occupations, Michigan is imposing significant cost on its citizens.
Existing economic research suggests that occupational licensing raises prices by as much as 16%.[4] Licensing also reduces employment by as much as 27% by making it more difficult to begin working in licensed professions.[5] Nationally, it is estimated that occupational licensing results in 2 million fewer jobs being created each year.[6]
Although licensing may have historically resulted in some benefits to consumers[7], there is little evidence that it is helping consumers in the present. Recent work finds little evidence that occupational licensing is improving the quality of services provided to consumers in the US and Europe.[8]
In summary, Michigan currently places unique restrictions on its citizens to begin working. These restrictions are very costly and generate little to no measurable benefits for consumers. Following the lead of the majority of other states and choosing less restrictive ways to regulate and protect consumers would be in the best interest of Michigan citizens.
[1] Data on certifications and licenses (CPS), Bureau of Labor Statistics, https://www.bls.gov/cps/certifications-and-licenses.htm, January 25, 2023.
[2] Noah Trudeau and Edward Timmons. State Occupational Licensing Index 2023. Archbridge Institute, https://www.archbridgeinstitute.org/state-occupational-licensing-index-2023/, March 20, 2023.
[3] https://csorwvu.com/
[4] President Obama White House, Occupational Licensing: A Framework for Policymakers, https://obamawhitehouse.archives.gov/sites/default/files/docs/licensing_report_final_nonembargo.pdf, July 2015.
[5] Peter Blair and Bobby Chung, (2019), How Much of Barrier to Entry is Occupational Licensing?. British Journal of Industrial Relations, 57: 919-943
[6] Evgeny Vorotnikov and Morris Kleiner, (2018), At What Cost? State and National Estimates of the Economic Costs of Occupational Licensing., Institute for Justice, https://ij.org/report/at-what-cost/#:~:text=By%20a%20conservative%20measure%20of,reach%20%24184%20billion%20or%20more.
[7] D. Mark Anderson, Ryan Brown, Kerwin Kofi Charles, and Daniel I. Rees, (2020), Occupational Licensing and Maternal Health: Evidence from Early Midwifery Laws., Journal of Political Economy, 128(11): 4337-4383.
[8] Morris Kleiner and Maria Koumenta (Eds.). (2022). Grease or grit? International case studies of occupational licensing and its effects on efficiency and quality. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.
