Is reform contagious?: The diffusion of universal recognition reforms

States commonly rely on occupational licensing laws to protect consumers; however, these laws can have substantial costs. As the recognition of the costs of licensing has grown, many states have been implementing reforms. The most common reform is the universal recognition of out-of-state licenses, which makes it easier to transfer a license from another state. Using spatial econometrics techniques, I examine factors related to a state’s choice to adopt universal recognition, testing whether adoption can be explained by proximity or characteristics within a state. Relying on a spatial autoregressive model, I find evidence that universal recognition adoption can be explained by the tightness of the labor market, economic conservatism, and fewer licensing barriers, suggesting that adoption of the reform is largely driven by characteristics of each state. While the diffusion of policy is usually influenced by the adoption of neighbors, for universal recognition, this does not appear to be the case.