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New ARPL Report: Valuing Professional Licensing in the U.S.

The Alliance for Responsible Professional Licensing (ARPL) recently released a first-of-its-kind quantitative research study.

2021-03-08

The Alliance for Responsible Professional Licensing (ARPL) recently released a first-of-its-kind quantitative research study, Valuing Professional Licensing in the U.S. ARPL commissioned Oxford Economics to develop the report, which explores the impacts of professional licensing in highly complex, technical fields.

The ARPL-Oxford report comes as licensing reform is emerging as a hot topic of debate in statehouses across America in 2021. The Valuing Professional Licensing report delivers a red flag to lawmakers and policy setters who are considering applying one-size-fits-all legislation in an attempt to roll back their state licensing programs. In 2020, several states attempted to pass bills that would eliminate licensure for various occupations and professions as a way to ease occupational mobility challenges caused by the pandemic or generate economic growth.

Many of these legislative efforts cite prior research on occupational licensing, which revealed only surface-level findings and relied on pooling data for all licensed professions and occupations to arrive at overgeneralized conclusions about the monetary and societal impacts of licensing across all professions and occupations. This study provides a deeper dive into the data to uncover nuanced findings about the effects of licensing on different types of professions and occupations.

Key findings of the Oxford research include:

  • Across all professions and occupations, licensing is associated with a 6.5% average increase in hourly earnings, even after accounting for the job holder’s educational attainment, gender, and racial demographics.
  • Among professionals in technical fields requiring significant education and training, a license narrows the gender-driven wage gap by about one third and the race-driven wage gap by about half.
  • Minority engineers, surveyors, architects, landscape architects, and CPAs can expect an 8.1% hourly wage increase on average after becoming licensed in their field.
  • Female engineers, surveyors, architects, landscape architects, and CPAs can expect a 6.1% hourly wage increase on average after becoming licensed in their field.
  • Both white professionals and male professionals were shown to benefit from licensing too, but to a lesser degree. White engineers, surveyors, architects, landscape architects, and CPAs can expect a 2.9% hourly wage increase after becoming licensed; and males in these professions can expect a 0.7% hourly wage increase after becoming licensed.
  • Those in trade and vocational occupations (e.g., barber, plumber, etc.) can expect a 7.1% hourly wage increase after becoming licensed, while those in a profession requiring advanced education and training (e.g., engineer, architect, etc.) can expect a 3.6% wage increase after becoming licensed.

These key findings, among others in the report, highlight how policymakers have a responsibility to acknowledge the inherent differences of licensing on various professions and occupations and to develop narrowly tailored policy solutions to solve occupation-specific licensing challenges. Broad-brush, one-size-fits-all policy doesn’t work, but responsible licensing does.

Alliance for Responsible Professional Licensing (ARPL) is a coalition composed of national associations that represent highly complex, technical professions and their state licensing boards. Members of ARPL are licensed in all 50+ U.S. states and territories. Associations within ARPL have established uniform education, examination, and experience standards and a proven national mobility path for professionals.

Members of ARPL include the American Institute of Certified Public Accountants (AICPA), American Society of Civil Engineers (ASCE), the American Society of Landscape Architects (ASLA), the Council of Landscape Architectural Registration Boards (CLARB), National Association of State Boards of Accountancy (NASBA), National Council of Architectural Registration Boards (NCARB), National Society of Professional Engineers (NSPE), and National Council of Examiners for Engineering and Surveying (NCEES).

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