Is Occupational Licensing a Barrier to Interstate Migration?

Janna E. Johnson and Morris M. Kleiner

No 24107, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Occupational licensure, one of the most significant labor market regulations in the United States, may restrict the interstate movement of workers. We analyze the interstate migration of 22 licensed occupations. Using an empirical strategy that controls for unobservable characteristics that drive long-distance moves, we find that the between-state migration rate for individuals in occupations with state-specific licensing exam requirements is 36 percent lower relative to members of other occupations. Members of licensed occupations with national licensing exams show no evidence of limited interstate migration. The size of this effect varies across occupations and appears to be tied to the state specificity of licensing requirements. We also provide evidence that the adoption of reciprocity agreements, which lower re-licensure costs, increases the interstate migration rate of lawyers. Based on our results, we estimate that the rise in occupational licensing can explain part of the documented decline in interstate migration and job transitions in the United States.

JEL-codes: H7 J01 J08 J1 J11 J18 J24 J44 J58 J6 J8 K0 K2 K31 L38 L51 L98 (search for similar items in EconPapers)
Date: 2017-12
New Economics Papers: this item is included in nep-lab, nep-mig and nep-ure
Note: LE LS PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

Published as Janna E. Johnson & Morris M. Kleiner, 2020. "Is Occupational Licensing a Barrier to Interstate Migration?," American Economic Journal: Economic Policy, vol 12(3), pages 347-373.

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