A great many occupational licensing requirements don’t pass the giggle test. Do you really need permission from the state to be a florist, horse masseuse, or fortune teller?
This month, New Jersey Governor Phil Murphy signed a bill that reduced the licensing requirements for hair braiders after conditionally vetoing a (unanimously passed!) bill to do away with the requirement entirely. In 2012 the Commonwealth of Virginia had the good sense to do away with the requirement that hair braiders be licensed as cosmetologists. In Cato Journal, Edward Timmons and Catherine Konieczny describe the positive effects of the 2012 reform:
We estimate the effects of removing the license requirement for hair braiding in Virginia in 2012. Using County Business Patterns and Nonemployer Statistics data from 2004 through 2014, we find evidence at the state level that deregulation has created more opportunities for smaller owner-operated beauty salons (an increase in proprietor density of more than 8 percent). A simple statistical test confirms that Virginia counties experienced beauty shop growth at a rate approximately 7 percent higher than that in contiguous counties in bordering states. Taken together, our findings support the notion that deregulation of hair braiding has enhanced economic opportunity for hair braiders in Virginia.
Diving a little deeper into the literature on the subject, the authors address the main theoretical justification for occupational licensing, consumer protection, and why it falls flat in this case. Reviewing data for nine states plus D.C. from 2006-12, only 95 complaints were filed against hair braiders (1% of the population). The crazy part? All but one of those complaints were filed by competing cosmetologists.
Furthermore, the study found that, while, the number of people employed by beauty salons declined, the number of of sole proprietor/owner beauty shops and the average annual earnings of beauty salon employees increased, showing the positive-sum outcome of the reform.
The authors acknowledge a few limitations to their data, namely that, despite bordering Virginia, data from Tennessee weren’t available. Additionally, their data only goes through 2014, but this could underestimate the benefits of reform to date based on the growth seen in the immediate wake of the reform.
Now, in the grand scheme of things, this seems like a relatively small reform. But 7% growth is nothing to scoff at, and neither is the increased income for braiders. These changes make a real difference in the lives of these practitioners, and policymakers would do well to keep this in mind before succumbing to nebulous (and, in this case, unfounded) arguments for “consumer protection.”