Occupational Licensing as an Implicit Barrier to High Skill Migration

That’s the subtitle of a new working paper from Peterson, Pandya, and Leblang. Here’s the abstract:

Skills are often occupation-specific, a fact missing from existing research on the political economy of immigration. Although analyses of survey data suggest broad support for skilled migration occupational licensing regulations persist as formidable barriers to skilled migrants’ labor market entry. Regulations ostensibly serve the public interest by certifying competence but are simultaneously rent-preserving entry barriers. We analyze both the sources of US states’ licensure requirements for international medical graduates (IMGs), and the effect of these regulations on migrant physicians’ choice of US state in which to work over the period 1973-2010. Analysis of original data shows that states with self-financing state medical licensing boards, which can more easily be captured by incumbent physicians, have more stringent IMG licensure requirements. Additionally, we find that states that require IMGs to complete longer periods of supervised training receive fewer migrants. Our empirical results are robust to controls for states’ physician labor market. This research identifies an overlooked dimension of international economic integration: implicit barriers to the cross-national mobility of human capital, and the public policy implications of such barriers.

4 thoughts on “Occupational Licensing as an Implicit Barrier to High Skill Migration

  1. Several thoughts here…. (1) the authors clearly have an agenda beyond the scope of understanding the way that licensing requirements impact the migration of skilled labor. This is evident in the third (“rent-preserving”) and fifth sentences (“easily be captured by incumbent physicians”). (2) Could the 5th sentence be re-written as “… states with government funded state medical licensing boards, which can more easily be influenced by political climate, have more lenient IMG licensure requirements.” (3) While I am sure that there are plenty of high-quality medical schools across the world, I for one would like to be certain that their medical graduates are as good as, or better, than the medical graduates produced by our domestic medical schools.

    1. They have theoretical expectations, but those expectations seem reasonable. The history of occupational licensing and scope-of-practice legal battles certainly show that medical associations have no compunctions about trying to use law to shut out competition. As for “political climate,” I highly doubt that immigrants who want to be physicians are out-muscling in-state professional organizations in the political game. The hypothesis that rent-seeking is more difficult when the licensing board has to rely on the general fund seems more plausible.

      1. i don’t disagree with your first point. My point is that they have laid out their bias in the abstract, and in my opinion, have brought into question their methods and interpretation (and possibly their reputation). Were I the reviewer, I would request that they strike the 3rd sentence in total, and the portion of the 5th that starts with “which” and ends with “physicians”, as they appear to be commentary by the authors and do not appear to add anything to their overall thesis.

        I think you’ve proved my second point, if I’m interpreting what you’re saying correctly. It sounds as if you’re saying that although the in-state professional organizations wield more political clout than IMGs, the government tempers that and makes it more difficult to establish a ‘rent-preserving’ licensing board. How exactly do they do that? Power of the purse? Political appointments? Regulations of their own? and how is this not subject to the political climate?

        BTW, either the link is bad, or the paper has been removed.

      2. Thanks, I guess they don’t allow incoming direct links to the PDF for some reason. I’ve changed the link to the HTML introduction to the paper.

        I don’t think have a theoretical orientation amounts to a “bias.” Either the evidence fits the theory, or it doesn’t. Looks as if the evidence is consistent with the theory they lay out here.

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