If you’re a license-holding professional, it may be harder than you’d expect to move your out-of-state license to Arkansas. Licensed workers from other states often have to go through the same licensing process all over again when relocating to Arkansas. These are unnecessary barriers that could convince you to move to other states. A solution many states, including neighboring Missouri, Mississippi, and Oklahoma, along with 16 other states, have recently implemented is a process known as universal licensing recognition (ULR). ULR refers to a system in which the licenses and certifications obtained by professionals in one state are recognized and accepted as valid in another state. This eliminates the need for professionals to obtain separate licenses and certifications in each state they work in, which can be a time-consuming and expensive process.

ULR allows licensed workers from other states to automatically or expeditiously become licensed in a new state. Exact processes differ slightly between states, but typically as long as applicants have one year of experience, are in good standing, and intend to establish residence in the new state, their licensing qualifications are recognized. When someone moves to Arkansas, we don’t make them pass additional qualifications to get an Arkansas driver’s license, since we know the rules don’t differ significantly between states. The same is true of licensing, yet we often do make individuals meet licensing requirements that exceed national standards before they can work in the state. Under the current status quo, Arkansas risks losing talented professionals to neighboring states with friendlier licensing recognition policies.

One of the primary benefits of ULR is increased mobility for professionals. With their licenses and certifications recognized across state lines, they are free to work in any state they choose, without the need to go through a cumbersome licensing process. This can be particularly beneficial for individuals who are looking to relocate their careers to a new job market, as they can take advantage of opportunities in other states without the added hassle of obtaining new licenses. While state ULR laws are fairly new, that residents of counties that border states that have enacted ULR policies are more likely to seek employment in neighboring counties across state lines, suggesting that friendlier licensing policy does have an effect on where people choose to work.��

Another benefit of universal licensing recognition is the improvement of standards in the industry. By establishing a universal set of licensing standards, it becomes easier for organizations to identify and recruit top talent from around the country. ULR also helps reduce the economic burden of licensing, since license holders moving to a new state will not have to pay the often high initial licensing and exam fees another time.��

Universal licensing recognition is a powerful tool that can benefit professionals, organizations, and consumers alike. By promoting mobility and lowering barriers to good jobs, it creates a more level playing field for professionals and helps to drive progress in the industry. State and many local governments spend millions of dollars each year on “economic development incentives” to try to attract jobs and businesses to Arkansas. ULR could do just that, without spending a dime of taxpayer money .As the world becomes increasingly interconnected, ULR will become increasingly important, and it is a concept that should be embraced by all stakeholders. A legal precedent for universal recognition already exists in Arkansas, since was enacted in the legislative session of that year for the spouses of active duty military personnel. It makes sense that if universal recognition benefits military spouses, it would also benefit other individuals who are either interested or compelled to move states.��

As of February 2023, 19 states have enacted universal licensing recognition legislation.��

1. Arizona (2019)
2. Colorado (2020)
3. Idaho (2020)
4. Iowa (2020)
5. Kansas (2021)
6. Mississippi (2021)
7. Missouri (2020)
8. Montana (2020)
9. Nevada (2017)
10. New Hampshire (2018)
11. New Jersey (2018)
12. New Mexico (2016, 2020)
13. Oklahoma (2021)
14. Ohio (2023)
15. Pennsylvania (2019)
16. South Dakota (2021)
17. Utah (2020)
18. Vermont (2020)
19. Wyoming (2021)

In a recently released study by the Institute for Justice, a public interest law firm, Arkansas was ranked as the 9th most burdensome state for licensing in the country. That’s compared to neighboring states like Mississippi and Louisiana at 44th and 45th most burdensome respectively. This is in part because Arkansas licenses more occupations on average than most other states. Out of a sample of 102 licensed occupations, Arkansas licenses 71 percent, compared to the 53 percent national average. Universal licensing recognition would therefore be a particularly efficient method for effective licensing reform in Arkansas.��

Arkansas should enact universal licensing recognition legislation comparable to laws passed already in the neighboring states of Missouri, Mississippi, and Oklahoma. Fortunately, there is a bill currently under consideration by the Arkansas State Legislature that would do just that. , sponsored by Senator Ricky Hill (R-Cabot), entitled “To Create the Automatic Occupational Licensure for Out-of-State Individuals Act” would be a massive improvement over the status quo in the state.��

SB90 would require Arkansas licensing boards to recognize out of state licenses provided the license holder has been in good standing for one year. If a professional is moving to Arkansas from a state that does not license their occupation, but Arkansas does license it, the bill requires that they have at least three years of experience in the occupation to be granted licensure in Arkansas. Additionally, licensing boards would be allowed to administer jurisprudence exams to out-of-state license holders where relevant. SB90 takes it one step further than some other states, since it does not contain a residency requirement – but only 5 of the current ULR states require residency to be established (see Table 1 of ).

Our legislators should strongly consider enacting SB90. A growing wave of states are adopting universal licensing policies, and Arkansas should do the same, or risk lagging behind our neighbors. ULR is a good policy that improves professional mobility, improves industry standards, and lowers the economic and legal burdens of professional licensure.��

References:

Follett, T., Herman, Z., and Hentze, I. (2021). Universal licensure recognition. National Conference of State Legislatures.

Deyo, D. and Plemmons, A. (2022). Have license, will travel: measuring the effects of universal licensing recognition on mobility. Economics Letters. 219.��

Institute for Justice. (2023). State Reforms for Universal Licensing Recognition.

Knepper, L., Deyo, D., Sweetland, K., Tiezzi, J., and Mena, A. (2022). License to Work: A National Study of Burdens from Occupational Licensing. 3rd Edition. Institute for Justice.

By Alex Kanode

The 2021 legislative session saw many changes concerning licensing of occupations in Arkansas.��

The Red Tape Reduction Working Group released a stating that there were 704,141 occupational licenses in Arkansas. That amounted to 52 percent of the state’s labor force at the time, according to the , or slightly more than one in every two jobs in the state.��

Occupational licensing refers to sets of requirements that a person must meet before they are legally allowed to work in a given profession. These can be fees, education, experience, or criminal background. Reform in occupational licensing remained a prominent issue for the legislature in 2021.��

Proponents of occupational licensing claim that it can be a way to protect consumers, but it can also be a way to protect producers from competition. High fees, lengthy education requirements, and excessive criminal background checks can keep people out of work. ACRE Scholar and UCA Associate Professor of Economics Dr. Thomas Snyder found evidence of this in his paper “The Effects of Arkansas Occupational Licensure Regulations”. If Arkansas reduced the number of lower income licenses to that of their neighbor Missouri, there could potentially be a .75% decrease in the state unemployment rate.

The Arkansas 93rd General Assembly passed general licensing reforms for many groups, including those below the poverty line, military service members, veterans and their spouses. When it is easier to get a license, it’s easier to earn a living. The legislature did a great job helping these groups. However, there are still improvements Arkansas legislators can make moving forward, especially with people looking to move to Arkansas from other states.

For people just starting out, licensing fees can be a serious impediment to working. Some licenses require $100 or more in fees to be able to work. That $100 can be a large barrier, especially on top of the education and experience requirements someone has to go through.

, with lead-sponsors Senator Ben Gilmore (R-26) and Representative David Ray (R-40) was designed to make it easier for people to work. This bill introduced an application fee waiver for people with incomes below 200% of the federal poverty line. People on programs such as Medicaid, SNAP, or unemployment are also eligible. This reduces one of the barriers to people finding work.

Another example is , sponsored by Senator Ricky Hill (R-29) and Representative Roger D. Lynch (R-14). This legislation improved portability of licenses for military service members, veterans and their spouses. Most licenses are determined at the state level, which makes it costly and difficult to move from one state to another.

However, Act 135 only improved portability for military service members and their spouses. There are still licensed people looking to move to Arkansas who aren’t married to someone in the military. The Arkansas legislature considered a bill, sponsored by Representative Tony Furman (R-28), that would have expanded the license portability improvement to all potential Arkansans.

This policy, known as Universal Recognition, is gaining traction across the United States. Nearby states , , and have all passed universal recognition legislation in the last year. Universal Recognition legislation usually stipulates that if an applicant has had a license in another state for at least a year and is still in good standing with that state’s board, they receive a license in the state they’re applying to. Applicants also often have to reside in the state they’re applying in and pass a criminal background check. This allows for easy transfer of experienced workers between states.

Unfortunately, HB1667 did not make it out of committee. During the April 1st House Public Health and Safety Meeting, legislators expressed fears that licensing boards wouldn’t be able to discover if applicants had medical malpractice lawsuits or a criminal history. But even with a criminal background check, the process would be much quicker than license transfers are currently. Arkansas legislators should watch how similar laws are working in nearby states. It’s now much easier for licensed individuals to leave Arkansas for Missouri than it is for a Missouri licensee to work here.

The legislature did a lot of good for Arkansas in the 2021 session. Lawmakers improved access to work for people below 200% of the poverty line by removing the barrier of upfront fees. They improved portability of skills for military members, veterans, and their spouses by allowing for automatic recognition of other states’ licenses. These weren’t the only changes. There were improvements for licensing people with a criminal history, ensuring that people don’t have to earn two licenses for the same job, and many more changes for specific licenses.��

All of this should be praised, but legislators should also look forward to future improvements to make Arkansas open for business.

By Caleb Taylor

Should Arkansas eliminate many fee-only licenses?

The 2019 Arkansas Legislature passed , mandating sunset reviews of every licensed occupation in Arkansas. “Occupational Licensing and Arkansas’s Act 600,” by ACRE Policy Analyst Alex Kanode discusses the reforms and missed opportunities of the Arkansas Legislative Council’s Occupational Licensing Review Subcommittee’s first round of sunset reviews.��

In his latest research distillation, “Occupational Licensing: Fee-Only Licenses,” Kanode discusses ways Arkansas can reform fee-only licenses.

Arkansas has a large number of regulations restricting what occupations people can work in and which businesses they can start. These regulations may be intended to protect health, safety, and quality for workers and consumers. But some licenses merely charge a fee, with no training or other requirements.��

Kanode writes:

One example of license fees used for other projects is the licensing of motor vehicle salespersons. They’re required to pay a $15 license fee to work at new motor vehicle dealerships. These funds are then used to pay for education grants for tech schools in Arkansas. It is in no way the responsibility of new car dealers to fund those programs, and the subcommittee recommended the repeal of that license.��

…��

The subcommittee should continue to consider whether the board’s actions fit the health and safety concerns of the profession. They should ask, “What is the purpose of this license?”

The fees themselves surely aren’t protecting public health and safety.��Removing regulations that tax businesses will be better for Arkansas’ economy, and that will help Arkansans in general.”

Arkansas legislators passed by Rep. Jim Dotson R-Bentonville during the most-recent legislative session. It removed a fee-only license for motor vehicle salespersons.

To find out what recommendations the subcommittee approved unanimously in their final meeting of 2020, you can check out their .��

For more on this topic, check out our labor market regulation research page.

By Caleb Taylor

ACRE Legislative Research Associate Dr. Nathan Smith recently testified in favor of legislation removing barriers to work to certain cosmetology workers

delicenses shampooers and exempts those who provide “simple” hairstyling services from being required to complete 1500 training hours to get a cosmetology license.

Smith said at a House Public Health, Welfare and Labor committee meeting on April 1st that the law would allow for more individual choice and for more market choice.

Smith said:

We all shampoo, blow dry and style our hair. You don’t add risk by having a professional do that for you. The only legitimate reason to have a license is for public health and safety. When that’s not at stake, it should be left to individual choices and markets to decide how a service is going to be provided.”

It was passed into law and is now .

You can watch Smith’s testimony (starts at 10:38 a.m.).

By Caleb Taylor

Should Arkansas exempt low-income residents from initial licensing fees?

ACRE Economic Policy Analyst Alex Kanode testified on how occupational licensing in Arkansas can serve as a barrier to opportunity for low-income workers at a Senate Public Health, Welfare, and Labor committee meeting on March 17th.��

Committee members were deliberating on whether to pass sponsored by State Sen. Ben Gilmore R-Crossett and State Rep. David Ray R-Maumelle.����

If passed into law, state licensing entities would be barred from requiring an initial fee for individuals who are seeking to receive a license in Arkansas if the applicant meets one of three requirements:

• is receiving assistance through the Arkansas Medicaid Program, the Supplemental Nutrition Assistance Program, the Special Supplemental Nutrition Program for Women, Infants, and Children, the Temporary Assistance for Needy Families Program, or the Lifeline Assistance Program
• was approved for unemployment within the last 12 months
• has an income that does not exceed two hundred percent (200%) of the federal poverty income guidelines

According to the Department of Health and Human Services, 200% of the federal poverty income guideline for a single individual in 2021 is $25,760.

The waiver for the initial fee does not include fees for a criminal background test, exam, and drug test.

Kanode said:

This bill helps remove one more hurdle between low-income Arkansans and re-entering the workforce or moving up the economic ladder. It’s a really good step towards helping Arkansans.”��

The bill has passed out of the House and Senate Public Health, Welfare and Safety committees and the full Senate unanimously. It has yet to be considered by the full House. You can watch Kanode’s testimony starting at 4:34:45.

��You can find out more about our research on labor market regulation here.

Three ACRE experts recently appeared in “Believe in Arkansas” segments hosted by Americans for Prosperity.

UCA Assistant Professor of Economics and ACRE Scholar Dr. Jeremy Horpedahl discussed on March 25th.

For more on Horpedahl’s recent research and testimony on sales taxes in Arkansas, check out this ACRE Review post on February 2nd.

ACRE Economic Policy Analyst Alex Kanode to help remove barriers to opportunity for Arkansans on March 11th.

For more on Kanode’s recent research and testimony on occupational licensing, check out this ACRE Review post on March 17th.

UCA Associate Professor of Economics and ACRE Scholar Dr. David Mitchell on February 25th.

For more on Mitchell’s recent research and testimony on scope of practice issues, check out this ACRE Review post on March 17th.

By Caleb Taylor

Two ACRE economic experts shared their research on occupational licensing legislation last week.

would have mandated that a licensing entity consider the “good moral character” of an individual before granting an occupational license.

“Good moral character” is defined in the bill as a personal history of honesty, trustworthiness, fairness, a good reputation for fair dealings, and respect for the rights of others and for state and federal laws.

ACRE Economic Policy Analyst Alex Kanode spoke about the economic research on occupational licensing at a House Public Health, Welfare and Safety Committee meeting on Thursday, March 4th. ()��

of 2019 has no “good moral character” provision. It clarifies relevant background checks for occupational licensing, allowing boards to consider occupational relevance when conducting background checks, and exclude only candidates whose past misconduct is relevant to the occupation they’re trying to enter, according to Kanode.

Kanode said:

Putting moral character back in the code won’t be helpful for Arkansans. It’s a general term applied to all boards and licenses. It doesn’t protect anyone.”

The bill on Tuesday, March 9th.

However, the bill failed to make it out of the Senate Public Health, Welfare and Safety Committee on Wednesday, March 10th after ACRE Scholar and UCA Associate Professor of Economics Dr. Thomas Snyder discussed his occupational licensing research with the committee. (Snyder’s testimony )

Snyder said:

It sounds like something that’s well intentioned, but it does have unintended consequences. It’s a subjective thing. Even if you define (good moral character) with honesty or dishonesty, that’s still subjective. Whenever you have more licensing requirements, you see more people out of the workforce.”

Arkansas already has the 3rd-most burdensome licensing requirements in the U.S. according to the Institute for Justice’s report. Arkansas also has the recidivism rate (reoffense rate) in the U.S., according to a comparison report by Virginia’s Department of Corrections. by the United States Sentencing Commission shows that unemployed ex-prisoners have a much higher probability of re-arrest than those employed. And a by Stephen Slivinski from Arizona State University found that states with high licensing burdens had higher recidivism rates.��

Evidence in a by Snyder and Saliou Ouattara in the Journal of Regional Analysis and Policy suggests that strict occupational licensing burdens lead to more property crime.��

You can find out more about our research on labor market regulation here.

By Caleb Taylor

Should new Arkansans with occupational licenses in their previous residence be given automatic licensure in the Natural State?

by State Sen. Ricky Hill R-District 29 would do just that for some Arkansans.

The bill expands automatic licensure to military members, military spouses and widows who move to Arkansas who have an occupational license in a different state, territory or district of the United States with a “similar scope of practice.”

Currently, Arkansas law has a much steeper hurdle requiring a “substantially equivalent license” from military members and spouses wishing to obtain an occupational license in Arkansas.��

The bill makes no changes to the occupational licensing hurdles non-military Arkansans face.

ACRE Economic Policy Analyst Alex Kanode said the previous language was “muddy” and the change would make it easier for military members, military spouses and military widows to apply for automatic licensure from state licensing boards.

Kanode said:

Occupational licenses reduce interstate mobility. It makes it harder for people to get jobs from one state to another. There’s no reason why people going across state borders would lose their training or education.”

SB 78 passed unanimously and will be considered by the Senate at 1 p.m. .

You can watch Kanode’s entire testimony (starts at 2:06:50).

You can read Kanode’s policy statement, “Occupational Licensing and Arkansas’s Act 600”, here which contains more suggestions for occupational licensing reforms for Arkansas.��

For more on this topic, check out our labor market regulation research page.��

Kanode and ACRE Scholar and UCA Associate Professor of Economics Dr. Thomas Snyder discussed in “” (published in the Arkansas Democrat-Gazette on October 22, 2020) a recent occupational licensing reform bill passed by the Missouri legislature, known as universal licensure recognition.

Arkansas’s occupational licensing burdens are measured in this research paper entitled “The Effects of Arkansas Occupational Licensure Regulations” by Snyder.��

Snyder was a co-author of with researchers from the Mercatus Center. This report gives an overview of occupational licensing in Arkansas and makes suggestions for reform.

What was the motivation and reasoning behind the original state regulation of barbers in Arkansas?��

ACRE Research Fellow Tanner Corley explored this question and more in an op-ed, “,” published in the Arkansas Democrat-Gazette on December 11.

According to Corley, Arkansas barbers were able to appeal to fears of unsanitary barber shops in order to pass a 1937 Arkansas barber law that required six months of barber practice or 1,000 hours in training.��

Corley writes:��

When the barbers used licensing laws to seek better wages and less competition, they were effectively denying some people the opportunity to make a living. This is how licensing laws work. Once implemented, it outlaws all unlicensed workers from practicing their trade.”

Corley is from Bismarck, Arkansas. He is a senior with a double major in History and Political��Science. After graduating he plans to attend graduate school for history.

Corley’s paper, “” co-authored with former ACRE Scholar-in-Residence Dr. Marcus Witcher in the Winter 2021 edition of Cato Journal also explores the history of barber licensing in Arkansas.

Corley and Witcher write:

While other scholars have investigated the consequences of such legislation, we believe more attention should be paid to the origins of occupational licensing laws. Our case study demonstrates that barbers in Arkansas captured the regulatory apparatus and used it to decrease competition in their profession and raise their wages. They also grandfathered themselves in to avoid the newly established requirements to receive a license. Finally, once the Barber Board was created, only barbers sat on the board and many of them engaged in rent seeking to secure positions both on the board and as inspectors. The creation of barber licensure in Arkansas was not established to protect public health but for private gain. Accordingly, we should be skeptical of occupations today that seek licensing for the “public good.”

For a broader look at occupational licensing in Arkansas, check out�� ACRE Economic Policy Analyst Alex Kanode’s policy statement, “Occupational Licensing and Arkansas’s Act 600”, here.��

For more on this topic, check out our labor market regulation research page.