Length of String Using Set Theory
Haskell function, 35 34 characters

f[]="{}";f(_:x)='{':f x++tail(f x)


Haskell program with hardcoded input, 48 or 49 47 or 48 characters

 f[]="{}";f(_:x)='{':f x++tail(f x);main=print$f"aaaa"


(47 characters if you don't mind extra quotes around the output; if you do, use putStr instead of print for a total of 48 characters)

Haskell program, 51 50 characters

f[]="{}";f(_:x)='{':f x++tail(f x);main=interact f