Study: North Dakota ranks above average on occupational licensing burden

Approximately 1 in 5 workers in the U.S. needs a license to work, making it costly for individuals to enter certain occupations. This hinders income mobility, increasing inequality. It also restricts the supply of goods and services, leading to higher prices. Some research has even found that licensing depresses wages for unlicensed jobs in similar industries.

Certainly, licensing rules differ among states, with some states enacting more burdensome rules than others, thereby inflicting more damage.

How does North Dakota compare when it comes to occupational licensing burden?

According to an Occupational Licensing Index recently released by the Archibridge Institute, North Dakota ranks 24th among the 50 states. North Dakota fared worse than all of its neighbors. It compared especially negatively to South Dakota, which ranks among the top ten least burdensome states.

Including both direct and indirect licensing, North Dakota has barriers to 164 professions, of which 124 are direct licenses. The median state has 163 barriers, and the average has 159. Kansas has the fewest number at 122. So, while not the worst state, North Dakota has substantial room for improvement.

This year, North Dakota became the latest state to adopt universal licensure recognition, which will likely make it easier for licensed workers in other states to move to the state. Given the state’s relatively concerning ranking on licensing burden, further reform is necessary.

Lawmakers should consider delicensing occupations that are rarely licensed in other states. Only four states, including North Dakota, license Medical Sonographers. This likely means that the license is unnecessary for health and safety, and is a good candidate for reform.

Beyond that, lawmakers should consider adopting less burdensome rules, such as registration, particularly for occupations that pose no tangible danger to safety and health.