"NBER Working Paper No. 24107
Issued in December 2017
Issued in December 2017
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."
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