Free to Grow? A Matching Methods Analysis of Economic Reform in the United States

30 Pages Posted: 24 Jun 2020 Last revised: 6 Oct 2021

See all articles by Justin T Callais

Justin T Callais

Texas Tech University, College of Agricultural Sciences and Natural Resources, Department of Agricultural and Applied Economics, Students; University of Louisiana at Lafayette - Department of Economics and Finance

Date Written: September 1, 2021

Abstract

Country-wide economic reforms have been shown to causally improve economic outcomes. However, little empirically rigorous work has been done at the subnational level, particularly within the United States. This paper uses matching methods to estimate the causal impact of economic reforms (measured as sustained and large five-year increases in the Economic Freedom of North American index) on subsequent net income per capita growth. The results suggest that state-level reforms provide a large, but short-term boost in economic growth. This also holds, and is statistically and impactfully more meaningful, when examining reforms in labor market regulation.

Keywords: economic freedom, regional development, matching methods

JEL Classification: R11, O18, H70

Suggested Citation

Callais, Justin, Free to Grow? A Matching Methods Analysis of Economic Reform in the United States (September 1, 2021). Available at SSRN: https://ssrn.com/abstract=3616385 or http://dx.doi.org/10.2139/ssrn.3616385

Justin Callais (Contact Author)

Texas Tech University, College of Agricultural Sciences and Natural Resources, Department of Agricultural and Applied Economics, Students ( email )

Box 42132
Lubbock, TX 79409-2132
United States

University of Louisiana at Lafayette - Department of Economics and Finance ( email )

Lafayette, LA 70504
United States

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