Untangling Hair Braider Deregulation in Virginia: A Case Study Approach

Abstract

In this paper, 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 examine Virginia border county pairs to compare beauty salon establishments before and after deregulation. In seven of the eight groups examined, the number of employer establishments in the Virginia counties grew either more quickly or at the same pace as did the number of employer establishments in the border county. Similarly, seven of the eight groups saw increases in the number of proprietor establishments. 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. We also found some 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) in Virginia. Taken together, our findings support the notion that deregulation of hair braiding has enhanced economic opportunity for hair braiders in Virginia.