Barber Licensure and the Supply of Barber Shops: Evidence from US States

Occupational licensure is on the rise. According to Kleiner (2015), over 29 percent of the U.S. workforce required some form of license. While a number of studies estimate the wage effects of occupational licensure, few studies look at the impact of licensure on entry into new business formation. In this paper we focus on the impact on barber shops, since many barber shops are sole proprietorships. Using state-level data on the occupational licensure of barbers from the Institute for Justice, we find that the number of exams required to become a barber is negatively related to the number of barber shops. We find no evidence that other state-level regulations of barbering such as average fees or the minimum age necessary to practice are associated with fewer barber shops.