Jacob Goldstein has a fascinating piece in the New York Times Magazine chronicling the impact of licensing restrictions on the American labor market, an issue that has drawn considerable attention in the blogosphere but that hasn’t reached a mass audience. To get a sense of the scale of the impact, consider the following passage:

Once upon a time, these barriers weren’t such a big deal. In 1950, fewer than 5 percent of Americans worked in jobs that required licenses. Today, it’s roughly 30 percent, and that number is likely to grow. In the coming years, global competition and the increasing rate of technological change will force many workers to bounce from career to career throughout their working lives. Nearly 13 million Americans are out of work; since the start of the recession, the manufacturing sector alone has lost about two million jobs. There’s little doubt that laid-off factory workers will find themselves increasingly looking for opportunities in landscape contracting, athletic training and in hundreds of other professions that require licenses.

Goldstein quotes Morris Kleiner, a University of Minnesota economist who has offered a back-of-the-envelope estimate of the economic impact of occupational licensing:

While it is not possible to precisely estimate the effects of substantially reducing occupational licensing, the current evidence suggests that such a reduction could translate into significantly higher employment, better job matches, and improved customer satisfaction. Low-income consumers, in particular, would benefit because reduced barriers to entry would reduce the prices of services provided (Shapiro 1986; Cox and Foster 1990). Suppose that the entire 15 percent wage premium for licensing is from rents (as opposed to human capital), labor supply is perfectly elastic, and the labor demand elasticity is 0.5. There are approximately 38 million licensed workers in the United States with average annual earnings of $41,000. Under these assumptions, licensing results in 2.85 million fewer jobs with an annual cost to consumers of $203 billion.

Kleiner goes on to note that licensing might have some benefits, e.g., by improving the quality of services or by encouraging a greater investment in human capital, but the limited evidence at hand does seem to suggest that rents are a very big part of the story. He also suggests that states and cities shift from occupational licensing to certification or registration as a lower-cost strategy to protect the interests of consumers.