Federal Regulation Job Creation And The Moderating Effect Of State Economic Freedom

Regulation has been shown to hinder employment and entrepreneurship, but regional variation is rarely explored. Engaging the theory of market-preserving federalism, we argue that regional economic freedom attenuates the negative influence of national regulation on net job creation. Using U.S. data, we find that regulation destroys jobs on net, but regional economic freedom moderates this effect. In regions with average economic freedom, a one percent increase in regulation results in 14 net jobs destroyed. However, a standard deviation increase in economic freedom attenuates this relationship by four fewer jobs destroyed. This moderation accrues strictly to older firms; regulation usually harms young firm job creation, and economic freedom does not attenuate this relationship.

We analyze the consequences of economic freedom on economic dynamism across U.S. states and over time. Using data from the Economic Freedom of North America index, we show that states with greater economic freedom have higher rates of gross and net job creation and establishment entry. The results are robust to the inclusion of many different control variables and alternative specifications, suggesting a connection between freedom and dynamism. This evidence supports theories in which government policies may impede business dynamism.

Volume 14 addresses the central issue of entrepreneurial action: while many factors are important to the phenomenon of entrepreneurship, entrepreneurship does not happen until someone takes action!

“Timely and important . . . It should be our North Star for the recovery and beyond.” —Hillary Clinton “Sperling makes a forceful case that only by speaking to matters of the spirit can liberals root their belief in economic justice in people’s deepest aspirations—in their sense of purpose and self-worth.” —The New York Times When Gene Sperling was in charge of coordinating economic policy in the Obama White House, he found himself surprised when serious people in Washington told him that the Obama focus on health care was a distraction because it was “not focused on the economy.” How, he asked, was the fear felt by millions of Americans of being one serious illness away from financial ruin not considered an economic issue? Too often, Sperling found that we measured economic success by metrics like GDP instead of whether the economy was succeeding in lifting up the sense of meaning, purpose, fulfillment, and security of people. In Economic Dignity, Sperling frames the way forward in a time of wrenching change and offers a vision of an economy whose guiding light is the promotion of dignity for all Americans.

Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.

Federal regulations affect nearly every area of our lives and interest in them is increasing. However, many people have no idea how regulations are developed or how they have an impact on our lives. Regulation: A Primer by Susan Dudley and Jerry Brito provides an accessible overview of regulatory theory, analysis, and practice. The Primer examines the constitutional underpinnings of federal regulation and discusses who writes and enforces regulation and how they do it. Published by the Mercatus Center at George Mason University, it also provides insights into the different varieties of regulation and how to analyze whether a regulatory proposal makes citizens better or worse off. Each chapter discusses key aspects of regulation and provides further readings for those interested in exploring these topics in more detail.

This is the ninth edition of the annual report, Economic Freedom of North America. The results of this year's study confirm those published in the previous eight editions: economic freedom is a powerful driver of growth and prosperity. Those provinces and states that have low levels of economic freedom continue to leave their citizens poorer than they need or should be.