Universal License Recognition and Interstate Worker Mobility: Evidence from Wyoming

Abstract

Occupational licensing affects approximately 25 percent of American workers and has been shown to reduce interstate labor mobility by creating barriers for workers who must re-certify when moving across state lines. This paper examines whether universal license recognition (ULR) laws, which allow states to automatically recognize out-of-state occupational licenses, increase interstate migration of licensed workers. I exploit the timing of Wyoming's 2021 ULR law (SF 0018) using a difference-in-differences design, comparing changes in interstate in-migration rates among licensed workers in Wyoming relative to similar states without ULR laws. The primary estimate suggests a 0.48 percentage point increase in interstate in-migration rates for licensed workers, representing approximately 11 percent relative to the pre-treatment control mean. However, a placebo test using unlicensed workers shows an even larger positive effect, suggesting that general migration trends to Wyoming during this period may confound the licensing-specific estimate. The results highlight both the promise and the challenges of evaluating state-level licensing reforms using survey microdata with small samples and concurrent macroeconomic shocks.