The “Freedom in the 50 States” study measured economic and personal freedom using a wide range of criteria, including tax rates, government spending and debt, regulatory burdens, and state laws covering land use, union organizing, gun control, education choice and more.
It found that the freest states tended to be conservative “red” states, while the least free were liberal “blue” states.
The freest state overall, the researchers concluded, was North Dakota, followed by South Dakota, Tennessee, New Hampshire and Oklahoma. The least free state by far was New York, followed by California, New Jersey, Hawaii and Rhode Island.
The study also compared its measures of economic and personal freedom to population shifts and income growth, and found that freer states tend to do better on both scores than those less free.
For example, it found a strong correlation between a state’s freedom ranking and migration, which means that Americans are gravitating toward states that have less-intrusive governments.
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New York, for example, saw a net migration of -9.2% between 2000 and 2011, and California’s was -4.2%. In contrast, Tennessee gained 4.4%, and Oklahoma gained 1.3%.
An IBD analysis of the data found that “red” states — those voting for Republican presidential candidates in the past two elections — saw an overall net migration of 2.2%, while “blue” states saw an overall average net migration of -0.3%.
“People are voting for places with greater freedom,” said William Ruger, a political scientist at Texas State University and one of the co-authors of the study. That was true, he said, even after controlling for things like weather and amenities that might attract people to states independent of these freedom measures.
The study also found that states with more freedom tended to see stronger income growth. This was particularly true in states with more regulatory freedom.
“Adam Smith was right,” Ruger said. “If you have economic freedom, you will have economic growth.”
IBD has previously reported that red states saw stronger job growth, lower unemployment and bigger gains in per capita income than blue states during the economic recovery. For example, IBD found that in the first three years of the recovery, red states saw 1.9% job growth compared with 1.2% for blue states.
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