Too much occupational licensing could stop people from moving to Illinois
Illinois has seen continual population loss for a decade. While taxes and lack of opportunities are driving people away, the state’s licensing requirements could be keeping people from moving in.
Illinois has faced years of continual population decline and new data from the U.S. Census Bureau shows the state has lost population for 10 years running, mostly driven by people moving to other states.
Illinois is not seeing enough people moving in to overtake those who move out. There are many reasons people want to move out of the state, but the consistently most-popular reason is the state’s high taxes. In surveys of those Illinoisans who actually made a move, job-related issues dominate the reasons they moved, according to the U.S. Census Bureau.
The difficulty in being able to easily practice a profession may be another reason people do not move into Illinois. States that license more professions and that impose higher burdens on license seekers see less immigration from other states.
If a state has 10% more occupational licenses than another state, the individuals without a college education residing in the state with fewer licenses will be 6.5% less likely to move to the state with more licenses. That’s according to research from the Cato Institute using data from the Institute for Justice on occupational licenses of low-income professions.
Indiana licenses 37 low-income professions, while Illinois licenses approximately 10% more licenses at 41 professions, according to the Institute for Justice. In 2022 Illinois gained the most residents on net from New York, Ohio, Massachusetts, Michigan and New Jersey. Save for Ohio, all those states have stricter licensing burdens than Illinois, according to the Institute for Justice.
More than just the existence of licensed professions, licenses that only are good in a single state predictably discourage license holders from moving out of state. According to a report from the American Economic Journal, members of professions with state-specific exam requirements are 36% less likely to move to another state than members of other professions. On the other hand, occupations with a national licensing exam do not seem to limit interstate migration.
Illinois could attract more people from other states by lessening the burden to obtain licenses and by making it easier to transfer licenses from other states. In a study of the migration of lawyers, license reciprocity between states increased migration between those states.
Interstate compacts such as the Nurse Licensure Compact or, going farther, universal license recognition such as has been enacted in Arizona, would encourage professionals from out of state to consider a move to Illinois. It could help stem the chronic outflow of residents suffered during the past decade.