Licensed to Move: How Universal Licensing Recognition Reshapes the Labor Market and Inter-State Mobility in the US

Abstract

This thesis deploys a Synthetic Difference-in-Differences methodology to explore the effect of the staggered adoption of universal licensing recognition (ULR) reforms adopted by twenty-four US states from 2014 to 2023 on key labor market and geographic mobility outcomes. For our baseline results, we notice that licensed workers see an increase in employment levels by 0.8%, real wages by 3.3%, and interstate commute by 0.6%, with no significant effects seen on usual weekly hours worked, interstate migration, or labor force participation. These baseline effects are primarily driven by states with longer post-adoption exposure, suggesting ULR’s impacts materialize gradually. A deeper analysis into ULR’s heterogeneous effects reveals that it uniquely increases labor force participation among married licensed females, with no analogous effect for their married male or unmarried female counterparts. ULR effects also vary across occupation types: wage gains and increased interstate commuting are concentrated among workers in previously low-mobility, geographically-constrained occupations, while employment gains are found among workers in sub-baccalaureate occupations. These effects are absent for high-mobility occupations and occupations requiring a bachelor’s or higher degree. Overall, ULR reduces key labor market frictions for licensed workers, expanding employment and geographic flexibility alongside real wage growth – suggesting a demand-side expansionary effect rather than a pure labor supply shock. This thesis presents the most up-to-date analysis of ULR in the US and positions it as a pro-equity reform, with benefits concentrated among married females facing disproportionate labor market barriers and workers in low-mobility, sub-baccalaureate occupations.