Occupational licensing can detour immigrant physicians’ career paths

Analysis of a small dataset shows only one in three immigrant physicians in the United States is on track to practice medicine

Tyler Boesch and Ryan Nunn of The Federal Reserve Bank of Minneapolis. Excerpts:

"The United States has for many years experienced substantial shortages of health care professionals that result in reduced patient access and higher health care costs. In this context, the health care system and the broader economy cannot afford to exclude qualified individuals from practice. Unfortunately, for many immigrant physicians (i.e., those who worked as physicians before immigrating) in the United States, this is exactly what has occurred. According to our analysis of data on approximately 300 physicians who immigrated to the United States between 2004 and 2022, only one in three who are employed report working as a medical resident or physician.

Occupational licensing is a key part of this story. Despite years of experience in their professions, immigrant physicians often struggle to meet the requirements of U.S. licensure, including the need to obtain residency training in the United States. Indeed, in prior research we found that licensing disproportionately reduces employment of foreign-born workers in the licensed sector."

"Physicians who immigrate to the United States tend to find employment of some kind. About 85 percent of the Upwardly Global physician clients in the dataset report being employed. However, only 34 percent of those who are employed report working as a medical resident or a physician.²

Many of those who were originally physicians find non-physician health care jobs"

"One common occupation is medical assistant, where individuals complete various administrative and clinical tasks in a health care setting. Upwardly Global staff note that while this occupation does not fully utilize their medical training, many clients feel that medical assistant roles offer important networking opportunities with medical professionals and exposure to the American health care system. But the median annual salary among Upwardly Global clients who are former physicians working as medical assistants is $41,600 in 2023 dollars. While this figure only pertains to the first year of employment and is likely low relative to subsequent earnings, it is just a fraction of typical starting salaries for physicians in the United States."

"Another common occupation is medical researcher, either in a health care or university setting. In this role, former physicians are able to use their medical expertise while avoiding the hurdles associated with relicensure. The median annual salary of Upwardly Global clients who are former physicians working as medical researchers is $59,000 in 2023 dollars—still far below that of practicing doctors, but again with the caveat noted above."

"In assessing why so many former physicians are not currently on track to practice medicine, one important consideration is the educational credentials immigrants possess. In the United States, a doctor of medicine (M.D.) or a doctor of osteopathic medicine (D.O.) are the most common degrees held by those practicing as licensed physicians. As shown in Figure 3, of the former physicians in our sample who are not on track for relicensure, 77 percent hold M.D.s: lack of an M.D. does not appear to be the barrier for most former physicians.³ Indeed, in our data sample 69 percent of M.D. holders are not currently practicing or on track to becoming physicians. 

Physician licensure is complicated. In addition to medical degrees, it typically requires exams, field-specific medical residencies, financial resources, and continuing medical education. (See Scheffler [2019] for a helpful discussion of these requirements as they apply to foreign-trained physicians.) Moreover, licensure requirements—for physicians or for most professionals in other fields—are not uniform across countries. When combined with the language barriers some experience, this makes for a daunting situation for immigrants who were formerly physicians."

"23 percent of immigrant physicians who are not on track to practice medicine in the United States are currently working as medical assistants. While these individuals may eventually still become relicensed, it seems likely that more would have done so had it been straightforward for them to translate their prior training into U.S. licensure."

"Representatives from Upwardly Global told us that many of its clients are deterred by the unavailability of medical residency slots and the required time, cost, and complexity of the licensure process. Smoothing this process and making residencies easier to obtain would almost certainly increase the number of immigrants who contribute their talents as practicing physicians."