The Impact of the Nurse Licensing Compact on Inter-State Job Mobility in the United States

The prevalence of occupational licensing has increased over time, while over recent decades the mobility of workers between jobs and across the country has declined. There is a concern that Stat-level licensing can hinder the movement of workers across the country. At least some States have recognised the potential costs arising from differing requirements across States, leading some States to establish or subsequently join the Nurse Licensure Compact, which frees nurses from having to obtain a new license to another Compact State. Using a new database – the Census Bureau’s Job-to-job flows – allows a fresh look at the relationship between occupational licensing and labour mobility. The paper examines the impact on migration flows across State boundaries when new States joins the Nurse Licensure Compact. Using a difference-in-difference econometric approach, the results suggest that mutual recognition of occupational licenses, at least in the health sector, can boost job-related migration across State boundaries. Joining the Compact does not have an impact on migration flows within the State, but may divert some flows to non-Compact States. The results suggest that mutual recognition of occupational licenses is one approach to mitigating the barriers to mobility that licensing can introduce.