Working Paper: NBER ID: w22344
Authors: Christina DePasquale; Kevin Stange
Abstract: There is concern that licensure requirements impede mobility of licensed professionals to areas of high demand. Nursing has not been immune to this criticism, especially in the context of perceived nurse shortages and large expected future demand. The Nurse Licensure Compact (NLC) was introduced to solve this problem by permitting registered nurses to practice across state lines without obtaining additional licensure. We exploit the staggered adoption of the NLC to examine whether a reduction in licensure-induced barriers alters the nurse labor market. Using data on over 1.8 million nurses and other health care workers we find no evidence that the labor supply or mobility of nurses increases following the adoption of the NLC, even among the residents of counties bordering other NLC states who are potentially most affected by the NLC. This suggests that nationalizing occupational licensing will not substantially reduce labor market frictions.
Keywords: Nurse Licensure Compact; Occupational Licensing; Labor Supply; Mobility
JEL Codes: J21; J44; J61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| NLC adoption (L24) | labor supply of nurses (J20) |
| NLC adoption (L24) | mobility of nurses (J61) |
| NLC adoption (L24) | labor force participation (J22) |
| NLC adoption (L24) | employment levels (J23) |
| NLC adoption (L24) | hours worked (J22) |
| NLC adoption (L24) | earnings (J31) |
| NLC adoption (L24) | likelihood of working across state lines (J61) |
| NLC adoption (L24) | travel time to work for nurses in metropolitan areas (R23) |
| NLC exposure (Y50) | aggregate number of nurse hours worked at hospitals (J22) |