Barriers to Labor Migration: The Case of Occupational Licensing
This note measures the effect on migration patterns of current state occupational licensing. The alternative system against which the existing system is measured is one in which persons who are licensed in at least one state would be admitted to practice in all other states without additional restrictions. This orientation is appropriate for several reasons. First, state licensing boards may limit the number of practitioners in their jurisdiction. If this is the case, then nationwide endorsement through either state or federal policy could alleviate uneven geographic distribution of licensed practitioners and ease possible shortages. Second, nationwide endorsement represents a potential policy reform, since the proposal is often supported by a majority of the members of a profession relative to deregulation, and could be adopted by national professional associations. Using a model of migration estimated for 14 occupations, our results show that more restrictive state licensing statutes reduced inmigration and were significantly related to increases in the earnings of the persons in these occupations.
Morris M. Kleiner, Robert S. Gay, and Karen Greene