Nurses Without Borders

The Nurse Licensure Compact forged an environment of multi-state professional licensing. Under the compact, registered nurses licensed in one of the now twenty-five party states may legally practice in the other participating states. This paper examines how mutual reciprocity of occupational licensing reduces barriers to employment. A sample of active duty military spouses, who do not have the luxury of making relocation decisions based on license transferability, was constructed using the American Communities Survey from 2001 to 2015 in order to identify effects on labor market participation. One would otherwise be confounded by the influence of employment opportunities on location selection. Both logistic regression and a linear probability model with state and year fixed effects are used to estimate the effect of multistate licensing. The treatment group consists of nurses whose military spouse was recently relocated from one party state to another participating state and consequently would be eligible for license reciprocity. The control group is composed of similar nurses whose spouse's duty reassignment was not between compact states for whom re-entering the workforce would require re-certification in the new state. Results indicate significant reductions in departures from the labor force, identifying the labor market inefficiencies created by single-state professional licensing.