One example that may explain a small portion of the reduction in dynamism is the substantial increase in occupational licensing.13 By some estimates, the fraction of workers who are required to hold a government issued license or certification to perform their jobs has risen from 5 percent in the 1950s to close to 40 percent.14 Like many policies, licensing has benefits and costs.
Among the costs are that it tends to reduce job switching and employment opportunities for excluded workers, and may restrict competition and thus increase prices faced by consumers. Among the benefits may be higher quality products and services and improved health and safety standards.