Occupational Licensing and Reduced Mobility
Evidence From the History of Barber Licensing
Americans move a lot less than they used to.
Mobility within the United States is important because it has historically been how individuals find new and better opportunities. Consider the historical example of newly freed slaves in the American South. In Robert Higgs’ Competition and Coercion: Blacks in the American economy 1865-1914, Higgs demonstrates that it was the combination of competition and racial coercion that determined the economic condition of newly freed Blacks. Though Blacks seized opportunities in business and politics during the Reconstruction Era, the period Higgs considers is mostly defined by racial discrimination and coercion. One of the only things that allowed Blacks to progress and avoid coercion was mobility. With the new ability to move from farm to farm (and state to state), many Blacks were able to move to where their labor was most highly valued. This competition to retain labor between employers drove up wages at a time when white southern racists had no other reason to help Blacks.
[If you’re interested, other books on the topic include The Other Bostonians, by the Historian Stephan Thernstrom, which explores, among other things, migration patterns in what is a major American city. Another recent book is The Complacent Class, written by the prominent economist Tyler Cowen, which urges Americans to return to our restless tradition and desire for change.]
Mobility has been beneficial for many other Americans (not to mention immigrants) as well. Mobility offers individuals the ability to move where their labor is more highly valued and choose environments where they are more likely to excel. It also allows individuals to move to where their labor is more productive, driving up wages and economic growth in the process. However, mobility is declining, and has been for a while.
As this graph shows (from Brookings), mobility has been steadily decreasing since at least the late 1940s when roughly 20 percent of the entire population moved states annually to only 9 percent as recently as 2019. This means less people are moving to different states where they might be more productive, thus forgoing potential increases in their incomes and the overall economic growth of the country.
Ultimately, there is no single answer that explains why mobility has decreased so much. Some simple explanations include the aging of the population and the ease at which people can research jobs and opportunities. In a country in which most people enjoy easy access to the internet, it is now easier than ever to research where opportunities are, move there, and stay put. The history of my own family offers a clear example. When my grandmother’s brothers turned 18 in a rural part of Arkansas, they put everything they owned in a car and moved to California. I’m not sure if they knew what they were going for, but they knew that California was growing and offered better job opportunities than they could find in the rural South. This type of mobility does not happen as frequently today. With the proliferation of job information on the internet, it is easier than ever to look up where job opportunities are without taking a major risk like they did. An aging population is also contributing to the decrease in mobility. As the growth of the US population decreases and much of the population moves into retirement, we should expect less Americans to move from state to state. The supply of housing, proliferation of air conditioning, and other factors likely play a role too.
Though changing demographics and technology help explain decreases in mobility, some economists point to the proliferation of occupational licensing laws and regulations as part of the explanation. In a working paper written by Janna Johnson and Morris Kleiner, the authors find that “the between-state migration rate for individuals in occupations with state-specific licensing exam requirements is 36 percent lower relative to members of other occupations.” (paper here) Furthermore, they find that for occupations that require a national licensing exam, there is no evidence of limited interstate migration. These results should not be surprising. Occupational licensing laws force individuals to go through state-specific training before being able to take a state-specific exam, pay a fee to the state board, and receive their license to work in a specific state. While many states have set up reciprocity agreements between states (making it easier to transfer a license to a different state), regulations and fees continue to disincentivize moving to a new state.
In my own research into the history of barber licensing, I have found evidence that suggest occupational licensing has historically contributed to a decline in mobility. The main proponent historically of barber licensing across the country was the International Journeyman Barber Union. Historically, the AFL associated barber union advocated for barber unionization and licensing in every state (and Canada). As such, the union has been a focal point for my research. In a recent trip to the Wisconsin Historical Society Library, where I spent time analyzing the union’s journal (The Journeyman Barber Journal), I was pleased to find an article that succinctly articulated how licensing can and did reduce interstate mobility.
The title of this particular article is “Would You Seek Employment as a Barber in Florida?” and it comes from the vol 51, no 1, June 1955 edition of The Journeyman Barber Hairdresser and Cosmetologists (the journal underwent numerous name changes over the years). The author, Alex Nagy (who was a publicist for the Florida State Barber Association), set out in this article to make people aware of the true facts about working in Florida as a barber before they decided to venture into the state. Nagy explained that while most people were aware that they would have pay the Jacksonville barber college $150 (almost equivalent to the purchasing power of $1,700 today) to take a barber examination, most did not know that “there are other expenses to follow, such as the fee to the State examining board and also the fees to the Cities barbers examining boards in various cities and towns throughout Florida. In each of these cities one to practice must take a barber’s examination after the State examination has been passed successfully.” Nagy also pointed to the “many barbers or too many barber shops” in Florida, as another reason to avoid migrating to the sunshine state.
Of course, as a member of the organized barbers in Florida, Nagy had every incentive to prevent barbers from moving to Florida. More barbers in Florida would have meant more competition, better prices for consumers, and diminished wages for resident barbers. However, Nagy did describe a very real dilemma for barbers in other states who might consider moving to Florida. If one already possessed a barber license (or lived in a state that didn’t require one yet), why would they move to Florida where they would have to take a state and city examination (and pay numerous fees) to be allowed to work? While it is hard to say the same for other occupations, it is clear that barber licensing laws have contributed to the decrease in interstate mobility (at least for barbers and their families).
Again, this should not be surprising. The International Journeyman Barber Union historically represented the interests of unionized barbers. Since it was in the interest of barbers to prevent new entrants into their industry, and actual physical entrance into the location of their businesses, they naturally sought licensing laws that set up barriers to occupational entry and interstate mobility.
The reality of interstate mobility in the United States is that we may never go back to the high levels of mobility we once had. Various factors discussed here and elsewhere make it clear that a combination of factors have contributed to this steady decline, and no single policy will change the trend. However, one way to increase mobility at least marginally would be to reform occupational licensing. While I, and many others, would be happy to see some occupations completely de-licensed, universal reciprocity is a clear step in the right direction. In fact, some states have already taken steps to resolve this issue. After Arizona passed a universal licensing recognition bill in 2019, South Dakota and Wyoming followed suit in 2021. More states should do the same. Consider the implications of one state not accepting a licensed person from another state. Is there a reason that barbers who are trained and licensed in one state should not be able to simply move to another state and continue working without new training or examinations? If the purpose of licensing laws is to guarantee a level of competency and safety, it should be logical that one state’s process is just as good as another’s.
To increase economic growth, human flourishing, and give people more opportunities to find fulfillment, we should tackle the problem of decreased interstate mobility. A clear and simple step toward that goal should be occupational licensing reform that makes it easier to work in the state of one’s choosing.