Licensing to Log In: The Interstate Medical Licensure Compact and Healthcare Employment

Abstract

Physician licensing is state-specific in the United States, creating barriers to cross-border practice and telehealth expansion. The Interstate Medical Licensure Compact (IMLC), adopted by 40 states between 2017 and 2023, created an expedited pathway for multi-state licensure. I estimate the effect of IMLC adoption on healthcare employment, establishments, and wages using a staggered difference-in-differences design with the estimator. Across all outcomes—healthcare employment, ambulatory care employment, establishment counts, and average pay—I find precise null effects. The overall ATT for healthcare employment is $-0.005$ log points (SE $= 0.010$). Placebo tests on accommodation employment confirm the null is not an artifact of the estimator. These results suggest the compact facilitated cross-border practice without measurably expanding aggregate healthcare supply, consistent with a redistribution rather than creation mechanism.