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Economic freedom improves income mobility: evidence from Canadian provinces, 1982–2018

Published online by Cambridge University Press:  29 November 2021

James Dean  and
Vincent Geloso
James Dean*
Affiliation:
Department of Economics, West Virginia University, Morgantown, WV, USA
Vincent Geloso
Affiliation:
Department of Economics, George Mason University, Fairfax, VA, USA
*
*Corresponding author. Email: [email protected]
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Abstract

Economic freedom is robustly associated with income growth, but does this association extend to the poorest in a society? In this paper, we employ Canada's longitudinal cohorts of income mobility between 1982 and 2018 to answer this question. We find that economic freedom, as measured by the Fraser Institute's Economic Freedom of North America (EFNA) index, is positively associated with multiple measures of income mobility for people in the lowest income deciles, including (a) absolute income gain; (b) the percentage of people with rising income; and (c) average decile mobility. For the overall population, economic freedom has weaker effects.

Keywords

Economic freedomincome mobilityinequalityI30O10P16
Type
Research Article
Information
Journal of Institutional Economics , Volume 18 , Issue 5 , October 2022 , pp. 807 - 826
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press on behalf of Millennium Economics Ltd.

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