Authored by Louisiana resident and chief economist at the Archbridge Institute, new report identifies deregulation, occupational licensing reform, and greater school choice as key opportunities

The Archbridge Institute—a nonpartisan, independent public policy think tank—and the Louisiana-based Pelican Institute released a new research report on the economic prospects of Louisiana, finding that the state ranks 50th overall in terms of social mobility. However, the new research also identifies reasons for optimism about improved social mobility in the future, such as entrepreneurship and economic growth; education and skills development; and tax and regulatory reform. Authored by Justin T. Callais, PhD, Chief Economist at Archbridge and a Louisiana resident, the report concludes that further deregulation, occupational licensing reform, and sustained momentum for the school choice movement (among other factors) can propel the state to “build back better.”

The report, titled “Building on Momentum: Louisiana’s Path to Mobility,” was co-published with the Pelican Institute. It can be accessed here.

To properly define Louisiana’s social mobility score, Archbridge considered four key factors: Entrepreneurship and economic growth (29th overall); institutions and the rule of law (50th); education and skills development (50th); and social capital (44th). Ranking below average in all categories and dead last in two, Louisiana performs particularly poorly in the following areas: Judicial system quality (50th overall), parental engagement and stability (49th); education quality and freedom (48th); predatory state action (46th); charity (46th); business dynamism (44th), and community activities and neighbors (40th). However, Archbridge cites recent tax, regulatory, and educational reforms as signs of new momentum.

There are now several opportunities for policy reforms that can boost social mobility in Louisiana:

  • Deregulation and sunset review process: Louisiana has some of the highest regulations in petroleum products manufacturing, chemical manufacturing, food and beverage stores, insurance carriers, and waste management. One way to cut regulation is to enact a “one in, two out” standard that would require the state legislature or government agencies to eliminate two regulations in order to add a new one. Another option would be a sunset review process for regulations—when a new regulation is added, it automatically lapses after a certain amount of time unless actively renewed (i.e. a three- or five-year basis).
  • Occupational licensing reform: Louisiana has the highest number of occupational licenses for low-income professions (77 out of 102). For additional context, Louisiana is one of just three states that requires a license to be an interior designer, one of five states with licenses for non-instructional teacher assistants, and one of eight states with required licensing to be a tree trimmer. Much like regulations, sunset review must be implemented for occupational licenses to ensure that they remain reasonable and relevant.
  • Tax reforms and spending cuts: Louisiana has passed a tax reform bill that cuts income and corporate taxes, but the sales tax burden is still the highest in the country. Tax cuts require spending cuts, in turn requiring a comprehensive approach to limited government: Phasing out the individual income tax over time; having a flat and lower corporate tax; pulling back sales tax increases; and calling a constitutional convention to adequately address spending concerns.
  • Building on school choice: In order to become a universal school choice leader, Louisiana should increase funding to education savings accounts through allocated state education spending, thereby increasing participation in school choice
  • Legal reforms: Current practices cost residents money, increase corruption, reduce trust in institutions, and increase the price of insurance. A major starting point for reform can be Louisiana’s unique pure comparative negligence law, which provides an avenue for individuals to recoup damages even when they were largely at fault.

“As a proud Louisianan, our state’s weaknesses when it comes to social mobility are all too clear, but there are still strengths and there is real room for growth if Louisiana’s policymakers take public policy reform seriously,” said Callais. “From occupational licensing reform to school choice and spending cuts, Louisianans can transform social mobility in our state by trusting in the free market and limiting the excesses of government. Government overreach has hurt employers, employees, and job-seekers for far too long, and it’s about time we took action with people’s best interests at heart. Otherwise, they will continue to look for greener pastures like Florida and Texas.”