An exploratory empirical note on the impact of labour market freedom on the female labour force participation rate in the US

Cebula, Richard J.; Alexander, Gigi

doi:10.1080/13504851.2014.962221

Cited by 6 publications

(4 citation statements)

References 4 publications

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“…Furthermore, the Campbell et al (2008, p. 1) study hypothesizes “that more economic freedom should lead to higher home prices” because the higher economic freedom level “will be capitalized into real estate prices.” By contrast, the present study focuses solely on labor market freedom sub-indices and the overall index of market freedom because of the effects thereof on the cost of producing and/or distributing goods and services to be transacted in the market and the resulting effects thereof on the prices of the broad spectrum of goods and services transacted in each state. Moreover, the interested reader will find that the recent study by Cebula and Alexander (2015) on the impact of higher levels of labor market freedom on the female labor force participation rate in the USA is consistent with the focus in the present study on the relationship between labor freedom and the lower costs of production and/or distribution of goods and services that result in the presence of greater labor market freedom.…”

Section: Introductionsupporting

confidence: 85%

The impact of labor freedom on geographic cost of living differentials

Cebula

Payne

Horner

et al. 2017

JEPP

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Purpose The purpose of this paper is to examine the impact of labor market freedom on state-level cost of living differentials in the USA using cross-sectional data for 2016 after allowing for the impacts of economic and quality of life factors. Design/methodology/approach The study uses two-stage least squares estimation controlling for factors contributing to cost of living differences across states. Findings The results reveal that an increase in labor market freedom reduces the overall cost of living. Research limitations/implications The study can be extended using panel data and alternative measures of labor market freedom. Practical implications In general, the finding that less intrusive government and greater labor freedom are associated with a reduced cost of living should not be surprising. This is because less government intrusion and greater labor freedom both inherently allow markets to be more efficient in the rationalization of and interplay with forces of supply and demand. Social implications The findings of this and future related studies could prove very useful to policy makers and entrepreneurs, as well as small business owners and public corporations of all sizes – particularly those considering either location in, relocation to, or expansion into other markets within the USA. Furthermore, the potential benefits of the National Right-to-Work Law currently under consideration in Congress could add cost of living reductions to the debate. Originality/value The authors extend the literature on cost of living differentials by investigating whether higher amounts of state-level labor market freedom act to reduce the states’ cost of living using the most recent annual data available (2016). That labor freedom has a systemic efficiency impact on the state-level cost of living is a significant finding. In our opinion, it is likely that labor market freedom is increasing the efficiency of labor market transactions in the production and distribution of goods and services, and acts to reduce the cost of living in states. In addition, unlike previous related studies, the authors investigate the impact of not only overall labor market freedom on the state-level cost of living, but also how the three sub-indices of labor market freedom, as identified and measured by Stansel et al. (2014, 2015), impact the cost of living state by state.

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Section: Introductionsupporting

confidence: 85%

The impact of labor freedom on geographic cost of living differentials

Cebula

Payne

Horner

et al. 2017

JEPP

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“…Numerous studies have, for example, established that states with greater economic freedom exhibit higher in-migration rates and higher population growth (Ashby, 2007; Watkins and Yandle, 2010; Cebula and Clark, 2011; Mulholland and Hernández-Julián, 2013; Cebula, 2014). Relatedly, Heller and Stephenson (2014) explore the relationship between economic freedom and unemployment rates, while its correlation with female labor force participation has been established (Cebula and Alexander, 2015). Additionally, the relationship between economic freedom and income inequality has been evaluated (Ashby and Sobel, 2008; Bennett and Vedder, 2013; Apergis et al , 2014).…”

Section: Economic Freedom and Research Findingsmentioning

confidence: 99%

Growth-enhancing economic freedom

Ghosh

McCannon

2017

JFEP

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Purpose We explore how economic freedom measurements can be used to guide policy. Design/methodology/approach We propose a method for creating a growth-enhancing economic freedom index, which allows for nonlinearities and interaction effects between the components to economic freedom. We use this method to illustrate that US states differ in which policy area generates the greatest gains. Findings To validate the method presented, we apply our index to state bond markets. Financial market participants have the incentive to properly evaluate states’ policies. If our measurement is useful, then it should correlate with bond ratings. Consistent with this hypothesis, we present evidence that state bond ratings are strongly correlated with our growth-enhancing economic freedom index. Originality/value It has been well-established that economic freedom is associated with good economic outcomes. Economic freedom is comprised of numerous dimensions. Thus, the marginal benefit of improving policy in one area can be expected to depend on the amount of freedom in the other dimensions. Which policy improvement is most impactful depends on the entire menu of current policies and, therefore, differs between states. Our new method can then be used as a guide to determining for a particular state which policies can be expected to impact economic well-being the most.

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“…This annual report provides a state-level score for the level of economic freedom present within a state based on three subcomponents: 1) size of government, 2) takings and discriminatory taxation, and 3) labor market freedom (Stansel et al 2014). This measure of institutions has been used in a large number of studies to help explain differences across states in factors such as income inequality (Ashby and Sobel 2008;Apergis et al 2014), housing prices (Campbell et al 2008), service industry growth (Gohmann et al 2013), entrepreneurship (Hall and Sobel 2008), equity prices (Lawson and Roychoudhury 2008), female labor force participation (Cebula and Alexander 2014), and income (Wiseman and Young 2013).…”

Section: Data and Empirical Approachmentioning

confidence: 99%

Economic Freedom and Recidivism: Evidence from US States

2015

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This paper provides an exploratory analysis into factors contributing to differences across states in recidivism rates. We provide the first such examination that incorporates differences in economic freedom. Using a panel data set from 1998-2010, we find that higher levels of economic freedom within a state are associated with lower recidivism rates within that state. A one percent increase in economic freedom is associated with a 0.47 percent decrease in recidivism. The relationship is stronger and more statistically significant for labor market freedom, with a one percent increase in labor market freedom being associated with a 0.67 percent decline in recidivism.

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An exploratory empirical note on the impact of labour market freedom on the female labour force participation rate in the US

Cited by 6 publications

References 4 publications

The impact of labor freedom on geographic cost of living differentials

The impact of labor freedom on geographic cost of living differentials

Growth-enhancing economic freedom

Economic Freedom and Recidivism: Evidence from US States

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