Free to Grow? A Matching Methods Analysis of Jumps in US State-Level Economic Freedom
30 Pages Posted: 24 Jun 2020
Date Written: June 1, 2020
This paper contributes to the literature that uses the Economic Freedom of North America (EFNA) index to evaluate relationships with various outcomes. Most of the literature estimates a linear relationship between economic freedom and those outcomes. However, using matching methods can be a better way to address potential selection bias issues. I examine the effects of five-year sustained jumps in EFNA scores on subsequent GDP per capita growth. My results show slight evidence for a short-term boost in income. However, these results are not robust and are largely contingent on the matching method used.
Keywords: economic freedom, regional development, matching methods
JEL Classification: R11, O18, H70
Suggested Citation: Suggested Citation