Association for Public Policy Analysis & Management

State occupational licensing requirements often present significant barriers to enter an occupation. Potential practitioners are often required to pass a written exam that tests applicants on occupation-specific knowledge. We use the introduction of licensing exams in Spanish to examine the impacts of occupational licensing on employment of cosmetologists. While cosmetology occupational licensing exams are available in English in all 50 states plus Washington, D.C., Spanish language licensing exams were introduced in the early 2000s in 22 states. Providing non-English occupational licensing exams may make successfully completing cosmetology licensing exams easier for individuals with relatively poor English writing and speaking skills, potentially leading to more Hispanic cosmetologists in states with Spanish language exams. The entry of these individuals into the cosmetology labor force may also affect the employment of non-Hispanics.

We exploit the varying availability of Spanish licensing exams across states and time to assess the impact of a state introducing a Spanish language licensing exam on the employment outcomes of Hispanics and non-Hispanics in cosmetology. Using data from the Current Population Survey (CPS) and a difference-in-differences estimator (DID), our initial findings show that the introduction of state cosmetology Spanish language licensing exams result in a small increase in the probability of Hispanics being employed as cosmetologists. In contrast, providing licensing exams in Spanish do not appear to reduce the likelihood of non-Hispanic employment as a cosmetologist or reduce the number of hours worked by non-Hispanic cosmetologists. Thus, Hispanic cosmetologists do not appear to serve as a substitute for non-Hispanic cosmetologists. Further, these results indicate that occupational licensing laws for cosmetologists may artificially constrain the supply of cosmetologists. We are also expanding our analysis to examine wage effects and the impacts of introduction of Vietnamese licensing exams on the labor market outcomes of Vietnamese cosmetologists.

Our research makes an important contribution to the occupational regulation literature by uniquely examining the effects of the expansion of the languages offered for occupational licensing exams on labor market outcomes. Further, our research is one of few studies to examine the effects of loosening the stringency of an occupational licensing regime on employment and wages. Our findings suggest that when drafting occupational licensing requirements, state policymakers and occupational licensing boards should consider accessibility for all potential practitioners.