Cosmetology Gets a Trim: The Impact of Reducing Licensing Hours on Colleges and Students

In the United States, licenses are required for entry into many different occupations and often require a minimum number of training or instructional hours. We consider the impact of changes to these hours requirements on students and postsecondary institutions, with a particular focus on the field of cosmetology. Cosmetology licensing requires a minimum number of training hours (between 1,000 and 2,100 hours) in every state and typically exceeds the time required for similar licenses. We use a difference-in-difference design based on 18 state-level reductions in required licensing hours for cosmetologists between 2010 and 2023. We ask how and whether changes to hours requirements influence student outcomes and institutional behavior. We find that lowering required hours is likely beneficial for students, as it shortens program length, lowers tuition, and raises completion. Schools respond by increasing tuition per clock hour, and we find increases in profits for large chain for-profit institutions. Although we cannot measure changes in quality, we find no evidence of reductions in earnings for cosmetologists. Impacts on taxpayers through federal student aid is ambiguous, but our results suggest that reductions in licensing hours for cosmetologists enhance efficiency.