Comprehensive occupational licensing reform in Nebraska

Also known as the Occupational Board Reform Act, LB299 requires legislative committees to review 20 percent of licenses under their purview a year, in a continuous five-year cycle.

This process creates a framework for identifying less restrictive regulations than licensing, including private certification, registration, insurance or bonding requirements, inspections, open market competition, or a combination of these approaches.

Workers with conviction histories could also receive an advisory opinion from state licensing boards about their eligibility to work in a licensed profession prior to beginning a training program.

While piecemeal occupational licensing changes have passed in the Nebraska Legislature before, reforms of more burdensome licenses have had trouble advancing from committee. That motivated the Platte Institute to educate lawmakers about the need for a more comprehensive approach.

Here is the full story, via Daniel Klein.


This is welcome news, I hope it's a contagious phenomenon. The incentive to cut the bloat will be all the greater when the vast numbers of licences on the under review prevent legislators' early lunch.

This seems like a good reform. NE also recently got rid of licensing for horse, dog and cat massage therapists, which I guess is a job.

I've never heard of the Platte Institute and it's always prudent to inquire who funds these groups, but it strikes me that local think tanks and organizations are the most effective in driving state policy change.

The funders are pretty much who you would expect - 'The Platte Institute for Economic Research does not disclose its donors, but some of its funding sources are known through other tax filings. PIER's known funders include: DonorsTrust and Donors Capital Fund: $240,400 (2010-2013)'

Libertarians of Prof. Tabarrok's ilk know how the bread is buttered when it comes to public policy discussions.

Libertarians of Prof. Tabarrok's ilk seem to have a pretty good track record of funding things that help ordinary people, rather than themselves. Hope they keep up the good work.

Prof. Tabarrok funds nothing - he is the recipient of funds that have been donated, generally with accompanying tax benefits for the fdonror, and is also paid by the taxpayers of the Commonwealth of Virginia.

Is all you do is posioning the well? It's doesn't matter if Satan funds them. They are either good policies or bad policies and you should make the rational case on the merits.

Oh, Nebraska. The only unicameral legislature and one of the only states to make pensions defined contribution, which they did decades ago. Have to love Midwest sensibility.

'private certification'

Why bother with regulatory capture when the money can go straight into someone's undoubtedly deserving pocket? Especially as there would also undoubtedly be stringent safeguards to ensure that the pursuit of profit does not trump other considerations.

OK, stop laughing, and just imagine a world where the person being paid for the driving test is the one that also decides who passes and who fails without any external checks. Call it Gresham's Law applied to certification, the sort of much better world that Prof. Tabarrok is doing his best to have us all step into.

There are many examples of privately-run certification and/or testing that work well. Standardized tests like the SAT, or product safety testing (conducted by UL and other companies) are examples that come to mind.

There is even some private administration of driving tests, at least for commercial licenses, in the U.S.

Yes there are potential concerns, but laughing the whole thing off is a dumb response.

Most/many computer certifications as well.

just imagine a world where the person being paid for the driving test is the one that also decides who passes and who fails without any external checks.

You have described most school teachers. At last those whose students don't have to take "high stakes" tests at the end of the year.

What the hell, Clockwork_prior? Aren't you the one always going on and on about how superior Germany is in every way to the United States? Are you not aware that most certification and inspection services in Germany are done privately?

Oh, of course you do. You're perfectly aware of the Technischer Überwachungsverein phenomenon. This is just another hammer for you to keep banging away at that boulder of yours. Keep banging! You'll crack it someday!

The Platte Institute and the Nebraska ACLU worked together to get this passed. What? If you read closely, the initial effort was to help workers with conviction histories get past restrictive licensing laws. Having achieved success in this effort through bipartisanship, the Platte Institute can move forward with its overall goal "to remove barriers to economic growth and opportunity". The lesson here is bipartisanship to achieve a baby step toward regulatory reform in order to gain some momentum for broader reform down the road. Too often ideologues refuse to compromise or seek bipartisanship in order to remain pure, even if that means gaining nothing.

Although allowing state and local governments to reform at their own pace may mean some people suffer longer than if the federal government just simply took over occupational licensing nationwide, adhering to the principle of subsidiarity does permit greater incremental innovation. Would a federal law have provided people with convictions the opportunity to check whether they could be licensed? Congratulations to Nebraska. Other state legislatures will learn from this example and follow with their own improved versions that will in turn serve as models for future reform. And the long term benefits will be greater than anything a federal regime could achieve.

Plus the Federal government has no business (or authority) getting involved in occupational licensing. Professions (e.g. MDs and civil engineers) are licensed at the state level; they can handle occupations (e.g. barbers, hair braiding, and plumbers).

Dear Tyler:
I'm the only one who is licensed to post here on licensing. Please stop.

What do you think about the bonding requirement for dealerships?

Should it be abandoned, or should the amounts be upped enough to protect the public against a potential scammer that collects down payments and/or full payments for vehicles, and skips town before delivering?

Given that bond requirements vary by state, including three states that don't require them at all, some interesting analysis of the impact of these requirements ought to be possible.

I would be surprised if there were a compelling case for them. Auto makers (for new cars) and providers of financing (for new and used cars) have an interest in preventing such fraud, and could take steps to prevent systematic fraud in the absence of government requirements. Small used car dealerships can be fly-by-night operations, but they are typically only selling cars that are on the lot, and customers usually don't pay more than a small deposit without actually driving away the vehicle.

Comments for this post are closed