Poverty Spells and Economic Freedom: Canadian Evidence

Abstract

Economic freedom is generally associated with higher average income levels. However, can the very poor benefit from it? Does it help them escape their disadvantaged position? Does it limits the possibility of entry into low-income status? In this paper, we use longitudinal data from Canada regarding the duration of low income spells, entries and exits from low-income status from 1992 to 2020 to deal with that question. Aggregated at the provincial level, these different indicators of low-income status are negatively related with the Fraser Institute's Economic Freedom of North America (EFNA) index.

Keywords: Economic Freedom, Poverty, Low Income

JEL Classification: D63, I31, I38