Labor Supply Effects of Occupational Regulation: Evidence from the Nurse Licensure Compact

53 Pages Posted: 13 Jun 2016

See all articles by Christina DePasquale

Christina DePasquale

Emory University

Kevin Stange

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy

Date Written: June 2016

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.

Suggested Citation

DePasquale, Christina and Stange, Kevin, Labor Supply Effects of Occupational Regulation: Evidence from the Nurse Licensure Compact (June 2016). NBER Working Paper No. w22344, Available at SSRN: https://ssrn.com/abstract=2794790

Christina DePasquale (Contact Author)

Emory University ( email )

201 Dowman Drive
Atlanta, GA 30322
United States

Kevin Stange

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy ( email )

735 South State Street, Weill Hall
Ann Arbor, MI 48109
United States

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