How Full Practice Authority Affects Physician Office Employment: Evidence from State Scope-of-Practice Laws

Abstract

This paper examines whether the expansion of nurse practitioner (NP) scope of practice affects employment in physician offices. Using administrative data from the Quarterly Census of Employment and Wages (QCEW) on NAICS 6211 (Offices of Physicians) for 2014-2024 and a staggered difference-in-differences design exploiting variation in state adoption of Full Practice Authority (FPA) laws between 2015 and 2023, I find that FPA adoption is associated with a 1.9 percent reduction in physician office employment, though this effect is not statistically significant at conventional levels (p = 0.09). The Callaway-Sant'Anna estimator reveals substantial heterogeneity across adoption cohorts: the 2017 cohort experienced significant employment declines of 2.9 percent, while the most recent adopter (2023, Utah) shows a significant positive effect of 1.8 percent, though this cohort has limited post-treatment data. Event study estimates show no evidence of differential pre-trends, supporting the parallel trends assumption. These findings suggest that FPA effects on physician office employment are economically small, vary considerably by context and time horizon, and may differ systematically between early and late adopters. The results contribute to ongoing policy debates about NP scope of practice by providing the first evidence on labor market responses in physician practice settings.