Minnesota Ranked 40th in Index of Economic Freedom | Minnesota


(The Center Square) — A Canadian think tank ranked Minnesota 40th out of 50 on a national index of economic freedom.

The “North America’s economic freedom in 2020is the 16th edition of a report measuring economic freedom in 2018. Using 10 variables, including government spending, taxes and labor market freedom, it ranked North America on a scale from zero to 10.

The report uses two indices to compare jurisdictions in the same and different countries.

In the section on the whole of government, the report takes into account legal systems and property rights, sound monetary policies and freedom of international trade.

State and provincial scores in each subcomponent are averaged to arrive at an overall score.

The freest state in the country is New Hampshire at 8.16, followed by Florida and Idaho at 8.10, then Wyoming (8.09) and Utah (8.08).

Among Midwestern states, Minnesota ranked last at 40th at 5.44

Michigan placed 31st, Ohio 35th and Illinois 34th – while Wisconsin and Indiana scored 19th and 8th respectively.

The Fraser Institute study shows that people who live in states and regions with higher levels of economic freedom often receive higher incomes.

“Jurisdictions in the most free quartile had per capita incomes 4.6% higher than the national average, while those in the least free quartile were 8.1% lower,” the report concludes. “In each index, the average per capita income in the most free jurisdictions is significantly higher than in the least free ones.”

New York came last with a ranking of 4.25.

The economic index is important because previous studies have analyzed the relationship between economic freedom and well-being as measured by income and economic growth.

A study published in Contemporary Economic Policy linked economic freedom to higher levels of economic growth and income.

The researchers found evidence of a pattern of real gross state product (GSP) per capita that affects the freedom-income relationship.

“Adjusting the direct and indirect effects of economic freedom on real GSP per capita, we find that a 10% increase in economic freedom is associated with a 5% increase in real GSP per capita.”

Figure 1.3 divides all measured North American states and provinces into quartiles of economic freedom to show the disparity in per capita income.

Full-of-government economic freedom and per capita income in Canada, the United States and Mexico in 2018.

“The results of the 20th century experiments should now be clear: free economies produce the greatest prosperity in human history for their citizens,” the report says. “Even poverty in these economically free countries would have been considered a luxury in unfree economies.”


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