Licensing Requirements Make It Harder for Women to Enter the Workforce
Women in the workforce need a government license to work more often than men. And new research finds that difference is made worse by states licensing occupations in which women are more likely to work.
My new policy brief at the Knee Center for the Study of Occupational Regulation at West Virginia University finds that a majority of licensed occupations in every state are occupations in which women represent half or more of total employment. The report uses a comprehensive list of licensed occupations by state along with employment data from the U.S. Current Population Survey and American Community Survey.
Overall, about one in four women need a license to work, which is the same share as for all workers. Meanwhile, less than one in five men need the same, notwithstanding their higher labor force participation rate. Despite this disparity, 64% of state occupational licensing is for occupations in which women make up half or more of total employment.
States vary in how much they license occupations in which women are predominantly employed, from California’s 53% to Alaska’s 76%, but no state licenses occupations in which men predominantly work more than the occupations in which women predominantly work. This creates a disproportionately high cost to women trying to enter or rejoin the workforce in all 50 states and D.C.
When states license such high shares of occupations in which women are likely to work, it makes it more difficult for women to enter or re-enter the workforce at all. Licensing more occupations in which women predominantly work does not just create inequitable labor market access; it also raises costs for services that women often rely on or commonly use. These services include child care, health care support services like lactation consulting, and even common beauty services like cosmetology, African hair braiding, and nail care.
State licensing requirements also make it harder for anyone to change occupations later in life, as often happens when women re-enter the workforce after staying at home with their children. If their spouse’s work moves them across state lines, either for military or civilian employment, over half the states in the country still will not recognize the license they had earned before. This can move them out of the workforce or impose more costs to become re-licensed.
Licensing the occupations can also include hidden barriers, especially for people trying to re-enter the workforce with a criminal record. For these women, meeting all the requirements, including completing formal education and passing any necessary exams, may not be enough if the state bars someone with any criminal record from working in any occupation – even if their record is unrelated to the occupation.
The costs of licensing can become prohibitively high very quickly. A young mother facing a decision between spending months or even years paying thousands in tuition while also paying for child care while she is at school might not have the financial flexibility to get a license. This is especially true for an occupation like cosmetology, which on average pays less than $30,000 a year but costs about $16,000 in tuition. States should not be forcing women to make this choice, especially for licenses that do not have a demonstrated public benefit.
Legislators have many options to reduce the burdens they impose on women trying to enter the workforce. They could review licensed occupations in their state to determine whether any evidence exists that the license is necessary to protect the public. Less burdensome alternatives often exist, including certification and professional liability insurance. The same could be done before new licenses are passed, using sunrise review commissions.
States can also recognize licenses from other states, as well as recognizing experience when workers come from states that do not license the occupation. Twenty-one states have adopted universal licensing recognition and research has found higher employment and tax revenue for the states that adopt this reform. Removing bans on people with criminal records from working in any licensed occupation would also expand labor market access for women and reduce potential recidivism.
Legislators should review the extent of the occupations they license, especially for those in which women predominantly work, and remove and reform licensing to support women entering and re-entering the workforce. Increasing workforce access by removing or reducing licensing barriers for women would benefit workers and consumers. These reforms could increase employment, reduce unnecessary debt related to licensing, and even lower prices for commonly used services.
Dr. Darwyyn Deyo is an Assistant Professor of Economics at San José State University and a Research Affiliate with the Knee Center for the Study of Occupational Regulation. She earned her PhD in Economics from George Mason University in 2017.
