Here, There, and Back Again: The Licensing, De-licensing, and Re-licensing of Barbers in Alabama

The economic effects of occupational licensing remains an understudied topic, but even less is known about the effects of the removal of licensing legislation. In this paper we take advantage of a natural experiment that occurred in the state of Alabama. Alabama was the last state to begin licensing barbers in 1973 and also the only state to de-license barbers in 1983. Since that time, several efforts have been made to re-license the occupation—most recently with a barber licensing bill that became law in September 2013. Relying on data from 1974 to 1994, we find that barber de-licensing has reduced the average annual earnings of barbers as well as the number of cosmetologist employees per million residents in Alabama. Taken together, our results suggest that licensing had been restricting competition in the market for hair-cutting services in Alabama.

Edward J. Timmons and Robert J. Thornton

American Economic Association

December 21, 2016

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