Is Occupational Licensing a Barrier to Interstate Migration?

Janna E. Johnson, University of Minnesota
Morris Kleiner, University of Minnesota

Occupational licensure, the legal process establishing qualifications to practice a trade or profession, has become one of the most significant labor market regulations in the US. At the same time, migration rates within the US have fallen dramatically. We examine to what extent occupational licensing, which imposes regulatory costs on moving across state lines, may be a contributing factor to the decline in interstate migration. Our preliminary analysis of five licensed occupations show that individuals in these occupations have lower interstate migration rates than their peers, while the rate at which they move within states is similar. We plan to perform a difference-in-difference analysis using changes in state licensing laws to see if the relationship between occupational licensing and interstate migration rates is causal. If so, we will be able to establish to what extent the increase in licensing is responsible for the decrease in interstate migration in the US.