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Who Benefits from Economic Freedom? Unraveling the Effect of Economic Freedom on Subjective Well-Being

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  • Gehring, Kai

Abstract

Who benefits from economic freedom? Results from a panel of 86 countries over the 1990–2005 period suggest that overall economic freedom has a significant positive effect on subjective well-being. Its dimensions legal security and property rights, sound money, and regulation are in particular strong predictors of higher well-being. The overall positive effect is not affected by socio-demographics; the effects of individual dimensions vary, however. Developing countries profit more from higher economic freedom, in particular from reducing the regulatory burden. Culture moderates the effect: societies that are more tolerant and have a positive attitude toward the market economy profit the most.

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  • Gehring, Kai, 2014. "Who Benefits from Economic Freedom? Unraveling the Effect of Economic Freedom on Subjective Well-Being," Working Papers 531, University of Heidelberg, Department of Economics.
  • Handle: RePEc:awi:wpaper:531
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    Keywords

    economic freedom; happiness; life satisfaction; government size; institutions; economic freedom; happiness; government size;

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