Occupational Licensing and Labor Market Mobility: Evidence from the Legal Profession

Abstract

We study how state occupational licensing requirements shape labor mobility across U.S. legal markets. Drawing on newly collected data, we link variation in state bar exam waiver policies to lawyers’ license acquisitions, professional disciplinary records, and educational histories. We find that bar exam waivers increase the number of experienced lawyers obtaining a new license by 38 percent, but that the additional lawyers are subject to more professional discipline and tend to have graduated from less selective law schools. Our results suggest that state-level occupational licensing regimes can create a trade-off between the supply and quality of professionals in an industry.