Rep. Sam Graves (R-Mo.) requested a study on Wednesday that would explore the rise of occupational licensing at the state level and its economic impact on entrepreneurs.
Graves, the chairman of the House Small Business Committee, sent a letter on Wednesday requesting that the Small Business Administration’s Office of Advocacy undertake a study to understand potential barriers that state and local regulations create for entrepreneurs.
“At a time of economic uncertainty, when our nation’s job creators, small businesses, are struggling to stay afloat, we are concerned that occupational licensing laws which are not narrowly tailored to the public benefit could have the unintended consequence of stifling entrepreneurship,” Graves said. “Occupational licensing also may impede innovation and business development as would-be entrepreneurs focus their resources on meeting licensing board requirements rather than on meeting the needs of their businesses or customers.”
The total economic costs of licensing regulations was between $34.8 billion and $41.7 billion per year, according to a 2007 study. An additional study conducted in June found that occupational licensing was the number one regulatory burden facing small firms.
The House Small Business Committee held two hearings in recent months on barriers to entrepreneurship that occupational licensing creates.
“Over the last 60 years the number of occupations subject to state and local licensure laws have expanded greatly,” Graves said. “Whereas in 1950, fewer than five percent of all occupations were licensed at the state level, today an estimated 29 percent of occupations are licensed.”