Remove Barriers to Mobility
As License to Work amply illustrates, licensing requirements vary widely across states. And even when they do not, boards are often reluctant to recognize credentials issued by other states. As a result, licensees who wish to move (or merely practice) across state lines face a conundrum: If their new state will not recognize their license, they must either complete costly and time-consuming additional or repetitive requirements (sometimes including starting over entirely) to become licensed anew or they must choose a different career. Workers from unlicensed states are at a particular disadvantage as they have no state-issued credentials to be recognized.
Licensing’s effects on worker mobility are well established and significant, driving down interstate mobility by up to 7% overall for long-distance moves, with occupations including teachers, electricians, pharmacists and pest control workers especially impacted. 1
The best strategy to improve mobility is to remove licensing barriers. After all, the most portable license is the one that does not exist. By removing barriers, states can more easily welcome workers from out of state and improve occupational access for their own residents.
The second-best strategy is universal licensing recognition. In the best version, a state simply recognizes other states’ licenses as valid for practice regardless of whether their requirements are more, less, or equally burdensome, so long as a licensee has practiced in good standing for a set amount of time, such as one year. This makes recognition administratively easy, as officials do not need to scrutinize other states’ licensing regimes, and it makes intuitive sense. If a worker has a clean record of practice, additional training or testing is unnecessary. Even better, for workers moving from states that do not license a given occupation, states can accept years of experience as a substitute.
To date, 18 states have passed some form of recognition, 2 and four of them recognize the experience of workers moving from unlicensed states. 3 New research finds that universal licensing recognition can increase migration to states that recognize out-of-state licenses with large benefits for those states. 4 But not all recognition reforms are created equal. Some undermine their core purpose by requiring workers to establish residency, delaying entry into the workforce and deterring cross-state practice. Others add administrative burden—and limit opportunity—by only recognizing licenses with “substantially similar” or “substantially equivalent” requirements to their own. And still others apply only to veterans and military spouses. While these groups are particularly hampered by licensing restrictions, they are by no means alone. 5
In 2020, Idaho, Missouri and Utah passed universal licensing recognition reforms that avoid many such pitfalls, containing no residency requirement and requiring only that an out-of-state license have a “similar scope of practice” rather than substantially equivalent requirements. 6 Vermont’s reform, passed in 2020, also demands neither residency nor substantially equivalent requirements, and it recognizes experience as a substitute for an out-of-state license. 7 And in 2022, New Mexico updated its 2016 recognition reform to no longer require applicants to establish residency. 8
Arizona’s reform, passed in 2019, 9 shows how universal licensing recognition can grow a state’s workforce: In just a few years, it has already resulted in 4,700 licenses being issued to workers moving from out of state. 10
As a reform strategy, universal recognition offers important benefits over other tools for addressing mobility: reciprocity agreements and interstate compacts. Both require that states reach agreement about licensing standards, so they often entail complicated negotiations, including agreements to raise burdens to be comparable to those of other states. They also risk freezing licensing requirements in place, as agreements can be hard to exit, thus serving as a barrier to future reform. They also must be negotiated for each specific occupation. And so far, research about how compacts affect mobility is limited and conflicting. 11
By contrast, with universal recognition, states maintain their legislative autonomy while easing the moving process for workers. They can unilaterally welcome newcomers without having to reach agreement with other states, and they maintain the authority and flexibility to enact future reforms.