Economic Freedom of North America at State Borders

Journal of Institutional Economics 12, no. 4: 885-893, 2016

10 Pages Posted: 24 Feb 2016 Last revised: 29 Nov 2016

See all articles by Ryan Murphy

Ryan Murphy

Southern Methodist University (SMU)

Date Written: February 22, 2016

Abstract

I use matched county pairs on either side of US state borders to investigate the causal effects of the Economic Freedom of North America index (EFNA) on local outcomes. This method is similar to Dube et al. (2010). I construct a panel of county pairs running from 1981-2012 and four measures of outcomes, logged real incomes, logged real per capita incomes, employment, and logged real wages, employing single year and five year differences-in-differences. I find small, but precisely estimated, effects on incomes but mixed effects on wages and employment. All regressions show low R^2. This supports the hypothesis that state-level economic freedom improves capital income or that it attracts capital income across state borders.

Keywords: Economic Freedom of North America, Economic Institutions, Regional Economics

JEL Classification: O43, R28

Suggested Citation

Murphy, Ryan, Economic Freedom of North America at State Borders (February 22, 2016). Journal of Institutional Economics 12, no. 4: 885-893, 2016. Available at SSRN: https://ssrn.com/abstract=2736644 or http://dx.doi.org/10.2139/ssrn.2736644

Ryan Murphy (Contact Author)

Southern Methodist University (SMU) ( email )

6212 Bishop Blvd.
Dallas, TX 75275
United States

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