Economic Freedom and Recidivism: Evidence from US States

This paper provides an exploratory analysis into factors contributing to differences across states in recidivism rates. We provide the first such examination that incorporates differences in economic freedom. Using a panel data set from 1998 to 2010, we find that higher levels of economic freedom within a state are associated with lower recidivism rates within that state. A one percent increase in state economic freedom is associated with a 0.47 % decrease in parolee recidivism. The relationship is stronger and more statistically significant for labor market freedom, with a one percent increase in labor market freedom being associated with a 0.67 % decline in recidivism.

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