Second Chances: The Importance of Occupational Licensing Reform to Arkansas’s Criminal Justice Reform Initiatives

Barriers to employment for former prisoners extend beyond the obvious problems of low education level and limited work experience. Based on some states’ “good character” laws, which allow occupational licensing boards to reject an applicant merely because of a criminal record, such boards have denied former prisoners the opportunity to receive a license. Even if someone with a criminal record can overcome the barrier erected exclusively for them, the other burdens of getting the occupational license—exams, fees, education, and experience requirements that vary by state—may constitute too high a hurdle.

This study combines data from the Institute for Justice, the Pew Center on the States, and the National Employment Law Project and estimates that between 1999 and 2007 the states with the heaviest occupational licensing burdens—including those impacting ex-prisoners specifically— saw a larger-than-average increase in recidivism rates. Conversely, the states that had the lowest burdens and no such character provisions saw a decline. 

Even if we ignore good-character restrictions, occupational licensing burdens still matter greatly. The states that had high occupational licensing burdens had greater increases or lower reductions in their recidivism rates than those that had low licensing burdens. This relationship was statistically significant even after controlling for variables such as the growth in the overall crime rate, the employment climate of a state, and per-capita income. 

(Published by the Arkansas Center for Research in Economics at the University of Central Arkansas.)