There is concern that state licensure requirements impede eﬃcient mobility of licensed professionals to areas of high demand. Nursing has not been immune to this criticism, especially in light of persistent nurse shortages and large expected future demand. The Nurse Licensure Compact (NLC) was introduced to solve this problem by permitting registered nurses to practice across state lines and making licensure easier to obtain for nurses moving between member states. We exploit the staggered adoption of the NLC across states and over time to examine whether a reduction in licensure-induced barriers alters the nurse labor market. Using data on over 1.5 million nurses and other health care workers from the 1990 and 2000 Census and the 2006-2012 American Community Surveys, we estimate the eﬀects of NLC adoption on commuting patterns and labor force outcomes. We speciﬁcally examine whether NLC adoption is associated with a greater likelihood of cross-state commuting, an increase in commuting times, and changes to employment and labor force participation. Our results indicate no eﬀect of NLC adoption on employment and labor force participation. Estimates are precise enough to rule out even small impacts on employment and labor force participation. Thus, it does not appear that cross-state licensing restrictions impact the aggregate labor supply of nurses. However, we ﬁnd modest positive eﬀects of NLC adoption on travel time to work as well as the likelihood of working across state lines, particularly among nurses living in MSAs that encompass multiple states. This suggests that eliminating cross-state licensure restrictions expands the geographic scope of the nurse labor market.
Association for Public Policy Analysis & Management
November 8, 2014