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Is Occupational Licensing a Barrier to Interstate Migration?

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  • Janna E. Johnson
  • Morris M. Kleiner

Abstract

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.

Suggested Citation

  • Janna E. Johnson & Morris M. Kleiner, 2020. "Is Occupational Licensing a Barrier to Interstate Migration?," American Economic Journal: Economic Policy, American Economic Association, vol. 12(3), pages 347-373, August.
    • Handle: RePEc:aea:aejpol:v:12:y:2020:i:3:p:347-73
    DOI: 10.1257/pol.20170704
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Chris Sampson’s journal round-up for 24th August 2020
      by Chris Sampson in The Academic Health Economists' Blog on 2020-08-24 11:00:07

    Citations

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    Cited by:

    1. Mengjie Lyu & Tingting Zhang & Hua Ye, 2023. "Labour market impacts of occupational licensing and delicensing: New evidence from China," British Journal of Industrial Relations, London School of Economics, vol. 61(4), pages 895-921, December.
    2. Koumenta, Maria & Pagliero, Mario & Rostam-Afschar, Davud, 2022. "Occupational Regulation, Institutions, and Migrants’ Labor Market Outcomes," Labour Economics, Elsevier, vol. 79(C).
    3. Stephan D. Whitaker, 2023. "Understanding Migration Trends to Prepare for the Post-Pandemic Future," Cleveland Fed Regional Policy Report, Federal Reserve Bank of Cleveland, issue 20230801, pages 1-32, August.
    4. Mocetti, Sauro & Rizzica, Lucia & Roma, Giacomo, 2021. "Regulated occupations in Italy: Extent and labour market effects," International Review of Law and Economics, Elsevier, vol. 66(C).
    5. Riley Wilson, 2021. "Isolated States of America: The Impact of State Borders on Mobility and Regional Labor Market Adjustments," Upjohn Working Papers 21-358, W.E. Upjohn Institute for Employment Research.
    6. Rostam-Afschar Davud, 2020. "Inklusive Beschäftigungspolitik: Fakten, Herausforderungen und neue Ideen zur Regulierung von Berufen," Zeitschrift für Wirtschaftspolitik, De Gruyter, vol. 69(2), pages 129-139, August.
    7. Peeters, Thomas & van Ours, Jan C., 2022. "International Assortative Matching in the European Labor Market," IZA Discussion Papers 15521, Institute of Labor Economics (IZA).
    8. Osborne Jackson, 2023. "Occupational Licensing and Occupational Mobility in New England," New England Public Policy Center Research Report 23-1, Federal Reserve Bank of Boston.
    9. Kihwan Bae & Edward Timmons, 2023. "Now You Can Take It with You: Effects of Occupational Credential Recognition on Labor Market Outcomes," Working Papers 23-03, Department of Economics, West Virginia University.
    10. Shishir Shakya & Alicia Plemmons, 2020. "Does Scope of Practice Affect Mobility of Nurse Practitioners Serving Medicare Beneficiaries?," Journal of Labor Research, Springer, vol. 41(4), pages 421-434, December.
    11. Peter Q. Blair & Mischa Fisher, 2022. "Does Occupational Licensing Reduce Value Creation on Digital Platforms?," NBER Working Papers 30388, National Bureau of Economic Research, Inc.
    12. Ning Jia & Raven Molloy & Christopher Smith & Abigail Wozniak, 2023. "The Economics of Internal Migration: Advances and Policy Questions," Journal of Economic Literature, American Economic Association, vol. 61(1), pages 144-180, March.
    13. Cascino, Stefano & Tamayo, Ane & Vetter, Felix, 2020. "Labor market effects of spatial licensing requirements: evidence from CPA mobility," LSE Research Online Documents on Economics 107054, London School of Economics and Political Science, LSE Library.
    14. Kalee Burns & Julie L. Hotchkiss, 2023. "The Role of Social Costs in Response to Labor Market Opportunities: Differences across Race," FRB Atlanta Working Paper 2023-7, Federal Reserve Bank of Atlanta.
    15. Massimiliano Tani, 2021. "Occupational Licensing and the Skills Mismatch of Highly Educated Migrants," British Journal of Industrial Relations, London School of Economics, vol. 59(3), pages 730-756, September.
    16. Morris M. Kleiner & Edward J. Timmons, 2020. "Occupational Licensing: Improving Access to Regulatory Information," Journal of Labor Research, Springer, vol. 41(4), pages 333-337, December.
    17. Suyoun Han & Morris M. Kleiner, 2021. "Analyzing the Influence of Occupational Licensing Duration and Grandfathering on Wage Determination," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 60(2), pages 147-187, April.
    18. Omar Bamieh & Andrea Cintolesi & Mario Pagliero, 2024. "Estimating the returns to occupational licensing: evidence from regression discontinuities at the bar exam," Temi di discussione (Economic working papers) 1440, Bank of Italy, Economic Research and International Relations Area.
    19. Wilson, Riley, 2022. "The Isolated States of America: Home State Bias, State Identity, and the Impact of State Borders on Mobility," IZA Discussion Papers 15193, Institute of Labor Economics (IZA).
    20. Dustin Chambers & Colin O’Reilly, 2022. "The economic theory of regulation and inequality," Public Choice, Springer, vol. 193(1), pages 63-78, October.
    21. Morris M. Kleiner & Wenchen Wang, 2023. "The Labor Market Effects of Occupational Licensing in the Public Sector," Staff Report 645, Federal Reserve Bank of Minneapolis.

    More about this item

    JEL classification:

    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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