Universal License Recognition and Interstate Migration: Evidence from State Adoption

Abstract

Occupational licensing creates barriers to interstate mobility, as workers must often re-license when moving across state lines. Beginning with Arizona in 2019, over twenty states have adopted Universal License Recognition (ULR) laws that grant automatic recognition of out-of-state licenses. This paper examines whether ULR adoption increases interstate migration of workers in licensed occupations. Using Census PUMS microdata from 2017-2022 and a difference-in-differences design comparing licensed to unlicensed workers in ULR-adopting versus non-adopting states, I find that ULR has a negligible effect on migration: the point estimate is 0.03 percentage points, economically indistinguishable from zero. Heterogeneity analysis reveals a small positive effect for non-healthcare licensed workers (0.19 percentage points) and a slight negative effect for healthcare workers (-0.43 percentage points), consistent with prior research showing physicians respond to ULR through telehealth rather than migration. However, the analysis is complicated by the COVID-19 pandemic, which dramatically altered migration patterns during the key post-adoption period. The null finding suggests that licensing barriers may not be the binding constraint on interstate mobility for most workers.