Approximately 1 in 5 workers in the U.S. needs a license to work, making it costly for individuals to enter certain occupations. This hinders income mobility, increasing inequality. It also restricts the supply of goods and services, leading to higher prices.
Compared to most states, Minnesota generally ranks middle of the pack on occupational licensing. This is mainly because Minnesota licenses fewer occupations than over half of all the states. However, room for improvement exists, as illustrated by an Occupational Licensing Index recently released by the Archibridge Institute.
In the 2025 edition of its Index, Archbridge ranked Minnesota 29th among the 50 states in terms of licensing burden. Minnesota beat its three neighbors — Iowa, Wisconsin, and North Dakota — but fared worse than South Dakota.
Including both direct and indirect licensing, Minnesota has a total of 161 barriers, of which 124 are direct licenses. The Median state has 163 licenses, and the average has 159. Kansas has the fewest number of barriers at 122.
While not the worst state for occupational licensing, Minnesota has substantial room for improvement, especially considering the state’s higher-than-average growth in licensing breadth and burden. Minnesota, moreover, licenses occupations that are rarely licensed in other states. For instance, Minnesota licenses Orthotic fitters, who are licensed in only four other states.
As Minnesota battles workforce shortages and a slowing economy, licensing reform could be the key to expanding the labor force and growing the economy.
