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States’ differing rates of licensure do not affect interstate migration, study finds

Supporters of deregulation of professional licensure often contend that licensing requirements discourage people from moving to different states that might not recognize their credentials, while federal policy in recent years has tended to support reducing licensure rates for this very reason, among others. A study published by the Bureau of Labor Statistics’ Monthly Labor Review in August, however, finds there is no link between states’ licensure rates and interstate migration.

The study, “Occupational Licensing and Interstate Migration in the United States,” looked at data from 2014-16—during which only 1.5% of the U.S. population moved between state lines in each year—and evaluated the volume of migration from each state to another state as a function of the percentage of workers in licensed occupations.

The research team used a “gravity” framework in their assessment, which accounts for not only the licensure rules at issue, but also the size and space of the state and other differences in conditions between jurisdictions.

In a survey of previous attempts to analyze the issue, the authors of the new study wrote that the previous research conclusions were mixed and hard to assess comparatively because they each used significantly different methodologies. Thus, they said, they wanted to introduce a standard methodology to study the issue.

Using data on interstate migration, they isolated rates of migration into several categories of people: 1) All migrants, 2) people aged 25-64 in the labor force, 3) that same group but with a college degree and 4) without a degree, and 5-7) the same divisions in an age group of 25-39 in the labor force.

Isolating the ratio of licensing between states from other variables which could affect migration between the two, the authors concluded that differing license rates between has no effect of migration flows.

In explaining their finding, the authors noted that licensing regimes in many states have become more uniform over time. They also speculated that licensing reciprocity barriers are not significant when compared to the other factors faced by people moving from state to state, like family ties, moving costs, and job opportunities.

“We concluded that licensing has essentially no effect because it is not that important a factor compared with other spatial and locational determinants of migration flows accounted for in our gravity model.”

The authors cautioned against standardization interventions based on a supposed link between licensing rates and hindrance of migration. “Specifically, we are concerned about the likely unintended consequences, especially because many occupations are already engaged in rationalizing licensing regimes across states.”