Economic Freedom and Unemployment around the World

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Using data from 87 countries and the years 1980-2003, this paper empirically analyzes whether and to what extent economic freedom affects unemployment. According to the regression results, economic freedom is likely to substantially reduce unemployment, especially among women and young people. A small government sector and a legal system characterized by an independent judiciary, impartial courts, and an effective protection of property rights most clearly seem to have beneficial effects. In addition, there are indications that freedom to trade across national boundaries and a light regulatory burden may also lower unemployment, though apparently in the long term only.
Original languageEnglish
Pages (from-to)158-76
Number of pages19
JournalSouthern Economic Journal
Issue number1
Publication statusPublished - 2007


  • Rent-seeking
  • Property Rights (P140)
  • and Voting Behavior (D720)
  • Elections
  • Unemployment
  • Models of Political Processes
  • Intergenerational Income Distribution (E240)
  • Wages
  • Legislatures
  • Employment
  • Capitalist Systems

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