Occupational licensure may limit the interstate movement of workers because it adds to the cost of moving between states. We analyze the interstate migration of 22 licensed occupations, proxying for the difficulty of the regulations by comparing state-specific licensed occupations to those with national licensing exams. Our empirical strategy also uses individuals who move a long distance, removing the influence of occupation characteristics and self-selection of migration-averse individuals into licensed occupations. Our estimates show that occupational licensing reduces interstate migration, but the magnitude of the effect can only account for a small part of the overall decline in recent decades.
Bibliographical noteFunding Information:
We have benefited from comments by Ian Fillmore, Hwikwon Ham, Jason Kerwin, Mindy Marks, Alexandre Mas, Jesse Rothstein, Sam Schulhofer-Wohl, David Slutsky, Betsey Stevenson, Aaron Sojourner, and Abigail Wozniak. We thank Jing Cai, Rebecca Furdek, Robin Lehninger, Wenchen Wang, and Seth Zawila for excellent research assistance, and David Van Riper for help in preparing our data. We appreciate comments from participants at the National Bureau of Economic Research Labor Studies meetings, American Economic Association annual meetings, Association for Policy Analysis and Management annual meetings, Baylor University, Federal Reserve Banks of Chicago and Minneapolis, Labor and Employment Relations Association annual meetings, Population Association of America annual meetings, Dartmouth College, University of Illinois, University of Kansas, University of Minnesota, and the W.E. Upjohn Institute for Employment Research. We gratefully acknowledge support from the Minnesota Population Center (P2C HD041023) funded through a grant from the Eunice Kennedy Shriver National Institute for Child Health and Human Development (NICHD). We thank the Smith Richardson Foundation and the Kauffman Foundation for their financial support of our research. The views expressed here are those of the authors and do not necessarily reflect the views or policies of the Smith Richardson Foundation, the Kauffman Foundation, the Federal Reserve Bank of Minneapolis, or the Federal Reserve System.
© 2020 American Economic Association.