Universal Occupational Licensing Recognition and Interstate Migration: Evidence from Staggered State Adoptions

Abstract

We estimate the effect of universal occupational licensing recognition (ULR) laws on employment among interstate migrants in licensed occupations. ULR laws, adopted by over 26 states between 2019 and 2024, allow professionals licensed in one state to practice in another without full re-licensure, potentially reducing barriers to interstate labor mobility. Using American Community Survey microdata from 2019–2022 and a difference-in-differences design comparing adopting states to never-treated states, we find that ULR laws increased employment rates among licensed occupation movers by 0.58 percentage points ($t = 2.32$). This effect is concentrated among healthcare workers and tradespeople, who historically faced the greatest licensing barriers. A placebo test using non-licensed occupation movers shows no comparable effect. These findings suggest that occupational licensing creates meaningful barriers to interstate mobility, and that policy reforms reducing these barriers can improve labor market outcomes for affected workers. \vspace{1em} JEL Codes: J44, J61, K31, R23 Keywords: Occupational licensing, labor mobility, interstate migration, licensing reform