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Income inequality and economic freedom in the U.S. states

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  • Nathan Ashby
  • Russell Sobel

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Abstract

This paper examines the impact of economic freedom on income inequality using cross-sectional data for U.S. states. While previous research has explored this relationship internationally, the results have been conflicting. In addition, while it seems obvious that the large institutional differences across countries will impact income inequality, it isn’t so obvious that the smaller variation in policies among U.S. states can have a measurable impact. Can improvements in income inequality be used as a justification for marginal pro-market policy reforms at the state level, or is this argument applicable only to national-level institutional reforms?

(This abstract was borrowed from another version of this item.)

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File URL: http://hdl.handle.net/10.1007/s11127-007-9230-5
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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 134 (2008)
Issue (Month): 3 (March)
Pages: 329-346

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Handle: RePEc:kap:pubcho:v:134:y:2008:i:3:p:329-346

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Web page: http://www.springerlink.com/link.asp?id=100332

Related research

Keywords: Inequality; Economic freedom; Institutions; H11;

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References

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  1. Julio H. Cole & Robert A. Lawson, 2007. "Handling Economic Freedom in Growth Regressions: Suggestions for Clarification," Econ Journal Watch, Econ Journal Watch, vol. 4(1), pages 71-78, January.
  2. Clarke, George R. G., 1992. "More evidence on income distribution and growth," Policy Research Working Paper Series 1064, The World Bank.
  3. Birdsall, Nancy & Ross, David & Sabot, Richard, 1995. "Inequality and Growth Reconsidered: Lessons from East Asia," World Bank Economic Review, World Bank Group, vol. 9(3), pages 477-508, September.
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  5. Berggren, Niclas, 2003. "The Benefits of Economic Freedom: A Survey," Ratio Working Papers 4, The Ratio Institute.
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  8. Steven F. Kreft & Russell S. Sobel, 2005. "Public Policy, Entrepreneurship, And Economic Freedom," Cato Journal, Cato Journal, Cato Institute, vol. 25(3), pages 595-616, Fall.
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  10. Julio H. Cole, 2003. "The Contribution of Economic Freedom to World Economic Growth: 1980-99," Cato Journal, Cato Journal, Cato Institute, vol. 23(2), pages 189-198, Fall.
  11. Dawson, John W, 1998. "Institutions, Investment, and Growth: New Cross-Country and Panel Data Evidence," Economic Inquiry, Western Economic Association International, vol. 36(4), pages 603-19, October.
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  13. Russell S. Sobel, 1999. "Theory and Evidence on the Political Economy of the Minimum Wage," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 761-785, August.
  14. Alfredo Esposto & Peter Zaleski, 1999. "Economic Freedom and the Quality of Life: An Empirical Analysis," Constitutional Political Economy, Springer, vol. 10(2), pages 185-197, June.
  15. Heckelman, Jac C & Stroup, Michael D, 2000. "Which Economic Freedoms Contribute to Growth?," Kyklos, Wiley Blackwell, vol. 53(4), pages 527-44.
  16. Scully, Gerald W, 2002. " Economic Freedom, Government Policy and the Trade-Off between Equity and Economic Growth," Public Choice, Springer, vol. 113(1-2), pages 77-96, October.
  17. Nathan J. Ashby, 2007. "Economic Freedom and Migration Flows between U.S. States," Southern Economic Journal, Southern Economic Association, vol. 73(3), pages 677–697, January.
  18. James D. Gwartney & Robert A. Lawson & Randall G. Holcombe, 1999. "Economic Freedom and the Environment for Economic Growth," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 155(4), pages 643-, December.
  19. Benjamin Powell, 2003. "Economic Freedom and Growth: The Case of the Celtic Tiger," Cato Journal, Cato Journal, Cato Institute, vol. 22(3), pages 431-448, Winter.
  20. Jac C. Heckelman, 2005. "Proxies for Economic Freedom: A Critique of the Hanson Critique," Southern Economic Journal, Southern Economic Association, vol. 72(2), pages 492–501, October.
  21. Berggren, Niclas, 1999. " Economic Freedom and Equality: Friends or Foes?," Public Choice, Springer, vol. 100(3-4), pages 203-23, September.
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Citations

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Cited by:
  1. Christian Bjørnskov & Niklas Potrafke, 2013. "The size and scope of government in the US states: does party ideology matter?," International Tax and Public Finance, Springer, vol. 20(4), pages 687-714, August.
  2. Bergh, Andreas & Nilsson, Therese, 2010. "Do liberalization and globalization increase income inequality?," European Journal of Political Economy, Elsevier, vol. 26(4), pages 488-505, December.
  3. Joshua Hall & David Yu, 2012. "Ranking the Economic Freedom of North America using dominetrics," Economics Bulletin, AccessEcon, vol. 32(3), pages 1949-1961.
  4. Leeson, Peter T. & Ryan, Matt E. & Williamson, Claudia R., 2012. "Think tanks," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 62-77.
  5. Compton, Ryan A. & Giedeman, Daniel C. & Hoover, Gary A., 2011. "Panel evidence on economic freedom and growth in the United States," European Journal of Political Economy, Elsevier, vol. 27(3), pages 423-435, September.
  6. Thomas A. Garrett & Russell M. Rhine, 2011. "Economic freedom and employment growth in U.S. states," Review, Federal Reserve Bank of St. Louis, issue Jan, pages 1-18.
  7. Apergis, Nicholas & Dincer, Oguzhan C. & Payne, James E., 2012. "Live free or bribe: On the causal dynamics between economic freedom and corruption in U.S. states," European Journal of Political Economy, Elsevier, vol. 28(2), pages 215-226.
  8. Samuel Jones & Michael Stroup, 2013. "Economic freedom and the mispricing of single-state municipal bond closed-end funds," Journal of Economics and Finance, Springer, vol. 37(2), pages 173-187, April.
  9. Gehring, Kai, 2012. "Benefit or burden? Unraveling the effect of economic freedom on subjective well-being," Working Papers 0531, University of Heidelberg, Department of Economics.

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