Association for Public Policy Analysis & Management

Recent work has shown that occupational licensing limits the ability of individuals in licensed occupations to move between states. However, this work ignores an important aspect of migration decision-making: it is often a decision made at the family level. Migrating may be the optimal choice for a family with two working spouses even if the move negatively impacts the career of one spouse, as long as the benefits (usually measured in earnings) for the other spouse outweigh this loss.

A large body of literature on the relationship between earnings and migration shows that this spousal earnings tradeoff exists, with an added gender component: husbands’ earnings tend to rise after a move, while the earnings of wives fall, implying that women are more likely to be the “trailing spouse.” This paper investigates the role occupational licensing plays in the migration decisions of couples, and their labor market attachment after an interstate move.

Individuals in licensed occupations face an additional cost to moving between states: they must transfer their license to their new state of residence. These costs can be substantial, including fees, extra training, and potentially taking additional state licensing exams. Many of the largest licensed occupations tend to be female dominated—such as teachers, nurses, cosmetologists, and social workers—meaning that re-licensure costs to migration are disproportionally faced by wives relative to husbands.

Re-licensure costs of interstate migration can affect the earnings of couples through two mechanisms. First, in a couple with one licensed spouse, the cost of re-licensure faced by that spouse may be high enough to limit the ability of the unlicensed spouse to take a job in another state—a job the spouse may well have taken if their spouse was employed in an unlicensed profession. Hence, an individual married to a licensed spouse may be less likely to move between states than an individual with the same occupation and characteristics whose spouse is in an unlicensed profession. Second, if such a couple chooses to move between states, the re-licensure costs faced by the licensed spouse may be high enough that they change occupation or leave the labor force entirely. This effect of re-licensure costs on labor market attachment likely impacts women more than men, as women are more likely to be in a licensed occupation, and are more likely to be trailing spouses.

I will use the 1996-2017 Annual Social and Economic Supplement of the Current Population Survey (CPS ASEC)—which provides information on current and last year’s occupation, as well as annual migration information—to investigate these mechanisms. I will employ an empirical strategy that controls for unobserved characteristics that may limit the likelihood of licensed individuals (and couples) to move a long distance. I will identify likely trailing spouses based on relative educational attainment of the husband and wife, adding whether each spouse is in a licensed occupation to this classification. My results will shed light on a cost of occupational licensing that is likely disproportionately borne by female workers.