Professional Licensing Reforms Could Unlock Growth and Mobility, OECD Says

Professional services such as legal advice, accounting, engineering, architecture and real estate play a critical role in modern economies. They help businesses operate, support infrastructure projects, facilitate property transactions and provide essential expertise to consumers. A new study by the Organisation for Economic Co-operation and Development (OECD), authored by Cristiana Vitale of the OECD Economics Department and Rosamaria Bitetti of Luiss University, argues that the way these professions are regulated can have far-reaching effects on economic growth, productivity and consumer welfare.

Drawing on data from 50 countries, the report finds that many regulations governing lawyers, notaries, accountants, architects, civil engineers and real estate agents may be more restrictive than necessary, creating barriers that limit competition and innovation.

When Consumer Protection Becomes a Barrier

Professional regulations are designed to protect consumers from poor-quality services and ensure that practitioners meet minimum standards. However, the OECD finds that many licensing systems require lengthy education, training and examinations that can discourage new entrants without necessarily improving service quality.

The study reviews evidence from several countries and finds that stricter licensing often reduces the number of professionals available in the market, raises wages for existing practitioners and increases costs for consumers. Yet there is limited evidence that tougher requirements consistently lead to better outcomes. For policymakers, this raises an important question: are all current regulations genuinely protecting consumers, or are some simply making services more expensive and less accessible?

A Missed Opportunity for Jobs and Social Mobility

One of the report’s strongest messages is that professional regulation affects not only businesses but also workers. Lengthy qualification requirements and limited entry pathways can make it difficult for people from lower-income backgrounds to enter high-paying professions.

The OECD argues that governments should consider more flexible routes into professions, including apprenticeships, competency-based assessments and recognition of work experience. Such reforms could help address skills shortages while creating more opportunities for young people and career changers.

The report also highlights barriers faced by skilled migrants. Complex procedures for recognising foreign qualifications often prevent qualified professionals from working in their chosen fields. Simplifying these processes could help countries attract talent and fill labour market gaps more effectively.

Why Policymakers Should Pay Attention

The report suggests that professional services reform could become an important tool for boosting economic growth. Since professional services are used by businesses across many sectors, reducing unnecessary restrictions could lower costs throughout the economy.

The OECD also points to concerns about self-regulation. In many countries, professional associations both represent practitioners and regulate entry into the profession. This can create conflicts of interest and encourage rules that protect existing members from competition. The study highlights reforms in countries such as Portugal and the United Kingdom that separate regulatory and representative functions to improve accountability and ensure that regulations serve the public interest.

For governments seeking productivity gains without large public spending programmes, reforming professional regulation may offer a relatively low-cost policy option with economy-wide benefits.

From Restrictive Rules to Smarter Regulation

Rather than relying heavily on licensing and other restrictions, the OECD recommends strengthening consumer-focused measures. Better public information on professional misconduct, service quality and disciplinary actions could help consumers make informed choices while encouraging professionals to maintain high standards.

The report also calls for fewer restrictions on advertising, ownership structures and cooperation between different professions. According to the OECD, allowing professional firms greater flexibility could encourage innovation, attract investment and improve service delivery.

The overall message is not that professional regulation should disappear, but that it should be better aligned with real risks. By modernising outdated rules and removing unnecessary barriers, governments could expand access to professional services, improve labour mobility, encourage innovation and increase productivity. At a time when many countries are searching for new drivers of growth, the OECD argues that professional services reform may be one of the most overlooked opportunities available.