Occupational licensing laws make it illegal for aspiring workers to begin working before meeting minimum entry requirements and define what services they can provide. Entry requirements include minimum levels of education and training, job experience, passing exams, and paying fees. As first movers in medicine—physicians have historically set scope of practice for other medical professions. As an example, there are still significant differences across states with respect to nurse practitioner full practice authority. Like every other state in the US, occupational licensing is prevalent in Utah. Recent estimates suggest that nearly 18% of prime age workers in Utah are licensed. Licensing is much more prevalent for workers with higher levels of education. More than 36% of Utah workers with education beyond a college degree are licensed.

Economic research has consistently shown that occupational licensing results in higher wages for licensed professionals and higher prices for consumers. More recent research finds that occupational licensing results in reductions in employment and significant deadweight losses. Evidence is much more ambiguous with respect to the effects of occupational licensing and the quality of service received. In fact, a recent study finds that consumers in an online marketplace for contracting services are much more interested in reviews from peers than the provider’s licensing status. With this evidence in mind, several states have taken steps to reform occupational licensing to make sure that regulations are serving the best interest of consumers.

Recognizing the need to reconsider occupational licensing in Utah, Governor Spencer Cox issued executive order 2021-01 immediately upon taking office in January of 2021. The executive order requires that each licensing agency in Utah conduct a review of occupational licensing requirements and make recommendations on “ways to remove barriers to licensing and limit unnecessary government regulation.” The order specifies that the review must be submitted no later than June 30^th.

This is an important first step for occupational licensing reform in Utah. To provide some assistance with this effort, we have organized this symposium on occupational licensing reform in Utah. Essays from 10 scholars that are experts on the effects of occupational licensing have produced pieces with a specific focus on guiding policy reform.

If there is a strong public interest argument for licensing, the strongest case can be made for medical professions. Nevertheless, certain aspects of medical licensing should be re-examined and three essays make specific recommendations for Utah. Ryan Nunn and Gabriel Scheffler highlight several restrictions that were waved as a result of emergency actions intended to increase access to care during the pandemic. The authors recommend making these changes permanent, such as recognition of out-of-state and international medical licenses. In a similar vein, Robert Orr recommends that Utah should unilaterally accept valid out-of-state medical licenses and significantly increase the length of the renewal period. Alicia Plemmons focuses on scope of practice for psychologists and pharmacists. She recommends that Utah grant prescriptive authority to psychologists and pharmacists, as other neighboring states have done, and also permit pharmacists to modify prescriptions that may be harmful to patients.

Occupational licensing reform also has implications for the student loan crisis. Licensing laws specify minimum levels of education, and it is not always clear that these requirements are set in the consumer’s best interest. Kihwan Bae highlights findings from a national study that licensed individuals borrow about $12,000 more than unlicensed individuals. Bae recommends de-licensing barbers and cosmetologists, a careful review of postgraduate educational requirements for occupational licensing, and additional options for vocational training at community colleges.

Michael Bednarczuk provides a telling case study of the cosmetology industry, which also touches upon the implications for licensing on student loan debt and highlights the poor economic returns received by most cosmetology school graduates. Despite the intent of licensing rules to protect consumers, the piece highlights that only a small fraction of cosmetology education is focused on health and safety. After Utah reduced education requirements from 2,000 hours to 1,600 in 2013, most cosmetology schools quickly reduced education requirements showing that educational costs in time and tuition are largely driven by state requirements, not the needs of consumers or aspiring cosmetologists. Like Bae, the author also recommends that Utah remove licensing requirements for cosmetologists.

Two pieces focus instead on licensing requirements for specific professions: real estate licensing requirements and dietitian certification. Conor Norris highlights how occupational licensing helps contribute to limiting competition in the real estate market in Utah. Home prices in Utah have significantly increased in recent months. Norris recommends several reforms including untying the commission that real estate agents for the seller and buyer receive, removing the requirement that agents initially work with a broker, and requiring more transparency in commission rates.

In his piece, Morris Kleiner, focuses on certification requirements for dietians. Highlighting the control that national associations often exert over state licensing requirements, Kleiner notes that these national standards can de facto supersede state regulation. This has implications for legal exposure for the state as a result of the 2015 Supreme Court’s verdict in North Carolina State Board of Dental Examiners v. FTC. Kleiner recommends that Utah enact a more rigorous review of its licensing requirements to make sure that regulation is fulfilling its intended purpose.

Finally, two pieces delve deeper into specific policy reforms. Like Morris Kleiner, Jason Sorens argues that the process of adding new licensing rules should involve a stronger “sunrise” review process that assesses the likely costs and benefits of new restrictions using Colorado and Vermont as case studies. Steve Slivinski examines the best practices for how states recognize new residents who have licenses issued by other states, weighing the pros and cons of approaches like universal recognition (in which an individual licensed by another state automatically may practice in Utah) vs. specific compacts (in which licenses from only certain states and occupations may be licensed).  Slivinski specifically recommends that Utah expand its existing recognition law and not provide broad authority to licensing boards to deny licenses for any reason.

In addition to these specific policy prescriptions, I offer the following suggestions regarding reviews of occupational licensing moving forward. First, it is not clear that licensing agencies are the best individuals to conduct a review of licensing. Licensing agencies have a good grasp of licensing regulations in Utah, but are unlikely to have familiarity with licensing regulations in other states. Licensing agency representatives also lack the independence necessary to conduct a meaningful review of licensing in the state.

If the state conducts a similar review in the future, the report would likely be more substantive and rigorous if it were conducted by an independent entity or authority. As an example, the Knee Center for the Study of Occupational Regulation was tasked with conducting a review of occupational licensing in Pennsylvania. As a university-based research center, the Knee Center (that I direct) had no direct ties to licensing boards or the regulators of the state and could provide an independent, data-driven assessment of occupational licensing in the state.

Aside from the review process itself, Governor Cox should consider beginning a Fresh Start Initiative after the submission of the report from licensing agencies. The framework of such an initiative is as follows. First, an independent committee would be established that has the authority to remove unnecessary licensing regulation. If not feasible to give such broad authority to the committee directly, the independent committee could make a set of recommendations, and the Utah legislature would be required to have a simple up or down vote on the entire package of regulatory reforms with no possibility of individual consideration of the recommendations. If policymakers affirm the reform recommendations, the committee could dissolve for an established time period (e.g., three years) before conducting a similar review and recommendation. If policymakers vote the recommendations down, the committee would have the ability to issue a new set of recommendations for legislators to consider.

A Fresh State Initiative as described would be more effective than a typical sunset process. Sunset committees make recommendations to legislators, but there is generally no clear pathway for the recommendations to directly influence policy. It is important that there are clearly defined next steps after any set of recommendations so that the review influences policy.

In addition to a Fresh Start Initiative, a framework should be established that subjects new licensing initiatives to independent review (also see Jason Sorens contribution for more details). Several states such as bordering state Colorado have a successful sunrise review process. Professional associations or other groups that seek licensure should be required to document how consumers are harmed by the current regulatory regime, and legislators should always follow the guidelines of using the least restrictive regulatory means of protecting consumers. Licensing is onerous and very difficult to remove if it is passed without ample justification. Getting regulation right is important and a careful sunrise review process can be very helpful in achieving this goal.

Finally, it is important for the state to evaluate the effectiveness of past reforms. Last year, the Utah legislature enacted a form of universal recognition legislation. The law creates a pathway for new Utah residents to have their licenses recognized without the typical bureaucratic delays associated with moving (Steve Slivinski also provides more details). Several other states, like bordering state Arizona for example, have enacted similar legislation. Unlike Arizona’s legislation, however, the law passed in Utah contains language that applicants may be denied licensing if “the division determines that there is reasonable cause to believe that the person is not qualified to receive a license in this state.”

This broad authority to deny licenses may be limiting the effectiveness of the new law. It has been estimated that more than 3,000 workers have taken advantage of universal recognition to move to Arizona. The Utah Division of Occupational and Professional Licensing should consider tracking the number of new citizens taking advantage of its new law and also the number of applicants denied as a result of the broad authority noted in the preceding paragraph. The Division should also note the reason for denial of licensing. If large numbers of applicants are denied licensing, this information should be noted and considered when evaluating the effectiveness of Utah’s 2020 reform.

Governor Cox should be commended for initiating a review of occupational licensing in Utah. In this short piece, I provide an overview of this symposium and some additional next steps for Utah for a successful regulatory review process. Moving forward, Utah should make sure that its review process is more rigorous and performed by an independent authority. After receipt of the review, Governor Cox should initiate a Fresh Start Initiative for occupational licensing in the state. Unlike sunset reviews, a Fresh Start Initiative would provide a clear framework for implement licensing reform. The Fresh Start Initiative should be coupled with a careful sunrise review process that subjects new licensing legislation to careful scrutiny. Finally, existing licensing reforms (e.g., 2020’s SB23) should be evaluated for effectiveness.