The educative Teacher Performance Assessment (edTPA) - a performance-based examination for prospective PreK-12 teachers to guarantee teaching readiness - has gained popularity in recent years. This research offers the first causal evidence about the effects of this nationwide initiative on teacher supply and student outcomes of new teachers. We leverage the quasi-experimental setting of different adoption timing by states and analyze multiple data sources containing a national sample of prospective teachers and students of new teachers in the US. We find that the new license requirement reduced the number of graduates from teacher preparation programs by 14%. The negative effect is stronger for non-white prospective teachers at less-selective universities. Contrary to the policy intention, we find evidence that edTPA has adverse effects on student learning.