Taking Too Much Off the Top? The Effects of State Licensing on Barbers Earnings

Abstract

Existing studies find little evidence that licensing has increased barber earnings. In this paper we measure the effect of licensing on barber earnings using recent microlevel data from the 2000 U.S. Census. as well as several new measures of the strictness of state licensing of barbers. Our results suggest that certain licensing provisions may have increased the earnings of barbers by as much as 26 percent. The magnitude of our estimates is somewhat higher than those found in studies examining the effects of licensing in similar professions.