Dear Members of the Committee:

I am a Senior Fellow at the Cato Institute, where I research labor market regulation, occupational licensing, and economic liberty. I submit this comment in strong support of reform to Montana’s occupational licensing system—and in particular, reform of the boards that enforce those laws. Decades of empirical research and a growing body of legal precedent make clear that the current structure of occupational licensing boards imposes significant economic harms on workers, entrepreneurs, and consumers while providing few of the public health and safety benefits their proponents claim.

The Collateral Consequences of Occupational Licensing

Occupational licensing requirements—which now affect nearly one in five American workers—impose measurable economic costs that consistently outweigh any benefits they provide. Research shows that licensing restrictions reduce labor supply and depress business formation, particularly for low-income workers and entrepreneurs. Estimates suggest licensing laws lower employment rates for affected groups by between 11 and 27 percent. Licensing also restricts geographic mobility, since licenses generally do not transfer across state lines without explicit reciprocity arrangements.

For those who have served a prison sentence, licensing laws add an additional barrier to reentry, pushing some back toward criminal activity and raising recidivism rates. There is little credible evidence that these costs are offset by meaningful improvements in service quality or public safety.