The push to deregulate many occupations is justified, in part, by the presumption that licensing restricts inter-state migration. Apart from a handful of studies which provide indirect evidence that licensing hinders interstate migration (Federman, Harrington, & Krynski, 2006; Peterson, Pandya, & Leblang, 2014), the earliest studies emerged in the mid-20th century just as the state regulation of occupations started to increase (Holen, 1965; Kleiner, 1977; Ladinsky, 1967a, 1967b; Pashigian, 1979; Pratt, 1980). These studies are similar in that they all focused on aggregate occupationally-specific US inter-state migration rates. Holen (1965), and Ladinsky (1967a, 1967b) consider the effect of licensing on inter-state migration by descriptively comparing aggregate US inter-state migration rates between occupations based upon presumptions about occupationally-specific licensing practices, Kleiner (1977) describes the covariation between occupationally-specific inter-state migration rates and the prevalence of occupationally-specific licensing practices, Pratt (1980) more directly estimates that correlation, and, finally, Pashigian (1979) estimates a multivariate regression model of aggregate occupationally-specific interstate migrates rates as a function of occupationally-specific licensing practices.
Several generalizations emerge from these early studies. First, occupations which are more likely to be licensed have lower rates of inter-state migration (Holen, 1965; Kleiner, 1977; Ladinsky, 1967a, 1967b; Pashigian, 1979; Pratt, 1980). While these studies generally focus on professions, there is some evidence that these effects apply as well to non-professional occupations (Ladinsky, 1967b; Pratt, 1980). Second, licensed occupations with reciprocation agreements have higher inter-state migration rates in comparison to otherwise similar licensed occupations (Holen, 1965; Kleiner, 1977; Ladinsky, 1967a, 1967b), although this effect may be contingent upon having a critical mass of participating states (Pashigian, 1979). Third, occupational differences in inter-state migration rates and licensing practices may be endogenous with other occupationally-specific spatial labor market processes and practices such as the the role of professional associations in developing spatial information networks and occupationally-specific labor market structures (Ladinsky, 1967a, 1967b; Pashigian, 1979). Most importantly, occupations requiring an investment in either developing a local clientele (e.g., dentists) or investing in localized knowledge necessary for successful practice (e.g., lawyers) have lower inter-state migration rates presumably due to higher costs of inter-state migration in these occupations (Holen, 1965; Kleiner, 1977; Ladinsky, 1967a, 1967b; Pashigian, 1979). In turn, such highly localized professions may develop more restrictive licensing regulations as a means for protecting their investment in their localized practices (Ladinsky, 1967b). Pashigian (1979) estimates that the effect of licensing and reciprocity practices among dentists and lawyers may reduce inter-state by up to 18%.
A limitation of these early studies is that they focused on aggregate occupationally-specific inter-state migration rates; an approach which ignored both how state-specific characteristics, including licensing, affect state-specific in- out- and net migration and that these characteristics may have different effects on each of these dimensions of inter-state migration. In two similar papers, Kleiner, Gay & Greene (1982a, 1982b) take a step forward in this regard and estimate the effects of state-specific occupational licensing practices on state-specific in- and out-mig