States across the nation are facing a shared problem of critical workforce shortages in various licensed occupations. Surprisingly, the emerging solution is a shared one as well – interstate occupational compacts.  

The original intent of occupational licenses was to safeguard consumers from unskilled workers whose lack of knowledge or competence could cause significant physical or financial damage to a customer. However, the concept of occupational licensing has slowly spread out to encompass occupations that pose no serious risk of danger when practiced by an untrained person—such as interior design.

The Problem with Licensing: Barriers Instead of Protection

Meanwhile, the increasing regulatory burden for many licensed professions have become extremely costly and time-consuming, discouraging entry into the market for individuals and operating largely as a revenue stream for the states. Additionally, the licensing requirements for the same occupation often vary significantly across state lines, making it harder for professionals to commute or relocate in doing so discouraging any mobility after obtaining a license. Research has consistently shown that occupational licensing is ultimately a protectionist racket that increases wages for incumbents by restricting competition.  

Interstate compacts allow licensed professionals to move or practice across member-state lines without the need to seek costly and time-consuming re-licensure. The existing 18 interstate occupational compacts allow either mutual recognition across member states or expedited licensure in the member states where they intend to practice. The compacts focus on the professions where many states experience the greatest shortage of workers, i.e. nursing, physicians, clinical counselors, teachers, etc.  

Nevada’s Competitive Edge: Expanding Interstate Compact Membership

Nevada stands in a unique position to benefit from the wave of interstate compacts for several reasons. Firstly, licensure reciprocity grants the Silver State a competitive advantage. Alongside the tax advantages, the business-friendly environment and existing infrastructure, allowing relocation of licensed professionals makes the state more appealing for business incorporation.

Secondly, among the states with the highest occupational licensing burden Nevada ranks 20^th, tied with California, leading to growing concern around economic development. Nevertheless, during the 83^rd legislative session it was clear that occupational licensure is a common concern across the political spectrum. Out of the proposed nine interstate compacts, the state passed three unanimously, for the professions where Nevada suffers the most shortages – audiologists and speech-language pathologists, clinical counselors, and physicians. This makes Nevada a member state of a total of 8 intestate compacts.  

The interstate compacts will prove especially critical for rural and frontier counties as many residents will now have access to out-of-state professionals through telehealth options. Long travel times and extremely acute shortage of mental health professionals, speech therapists, and more can be most easily relieved with policies of this nature.  

National Interstate Compact Trends and Lessons for Nevada

Looking at the national snapshot of state participation, some trends are clear. Nebraska, Kansas, Colorado, and Alabama lead the nation with 14 interstate compact memberships each signaling high flexibility as well as high demand. On the other hand, California and New York both have not joined any interstate compacts keeping their labor markets insulated and limiting the flow of professionals both in and out of the state.  Interstate Medical Licensure Compact, Nurse Licensure Compact, and Psychology Interjurisdictional Compact all have over 40 member states, indicating that the medical professions experience the most heightened consumer demand across the country.  

Despite the evident upsides, and the optimistic outlook that many states hold, it is important to note that interstate compacts work only if they maintain a low and uncomplicated threshold across the state lines. If entry level costs, requirements and examinations become too burdensome, the value of the policy will disappear, and so will the desire for professional participation. In the meantime, what Nevadan professionals need is more flexibility and less red tape which is the precise solution that the compacts offer.  

Further Reading

• Interstate compacts, 2025 Legislative Scorecard, Nevada Policy – https://nevadapolicy.org/scorecard

• “Rural Nevada Has Three Licensed Psychiatrists. That’s A Warning Sign.” – https://nevadabusiness.com/2025/07/rural-nevada-has-three-licensed-psychiatrists-thats-a-warning-sign/  

• “New health laws can benefit military families who move to Nevada” – https://www.kunr.org/local-stories/2025-07-21/new-health-laws-can-benefit-military-families-who-move-to-nevada  

• “Occupational Licensure Interstate Compacts in Action” – https://compacts.csg.org/wp-content/uploads/2020/11/OL_Compacts_InAction_Update_APR_2020-3.pdf