Academic Center: Reform Licensing To Help People In Poverty Find Work And Opportunity | Eastern North Carolina Now

    Publisher's note: The author of this post is Jon Sanders, who is Director of Regulatory Studies for the John Locke Foundation.

    Suppose there was an academic center focused on issues of poverty, work, and opportunity. Suppose this center pledged to "examine innovative and practical ideas" for moving people out of poverty. Suppose its leadership was interested not in raising their own profiles, but in honestly upholding the center's mission.

    Would not such an academic center have produced a report like this one? It is by Stephen Slivinski, a senior research fellow at the Arizona State University Center for the Study of Economic Liberty.

    Slivinski's report explores an innovative and practical idea: "How State Occupational Licensing Hinders Low-Income Entrepreneurship." He uses research findings to argue that entrepreneurship can be a ladder out of poverty for low-income individuals as well as a boon to low-income neighborhoods.

    Here is an excerpt (with emphasis added):


    What stands in the way is occupational licensing, especially in a state like North Carolina. Slivinski ranked N.C. tied for 13th highest among the states in percentage of low-income occupations licensed.

    To address the problem of licensing, Slivinski proposed:

1. sunset reviews of occupational licenses
2. shifting to voluntary private certification

    (Compare those to Recommendations 1 and 2 from the John Locke Foundation's Agenda 2014 entry on occupational licensing.)

    Slivinski also cited earlier research by Douglas Holtz-Eakin, Harvey S. Rosen, and Robert Weathers. They found that the positive effects of low-income entrepreneurship were even stronger in the long run for blacks than nonblacks. As they wrote,


    Those positive effects and "double dividends" for the poor are prevented by state licensing schemes, especially in a heavily regulated state like North Carolina.

    Because "lowering certification barriers to entry is likely one of the best ways to encourage more entrepreneurial endeavors among low-income households," Slivinksi concluded the following: "Reform of the existing occupational licensing regime is arguably the most important action [policymakers] can take."