Tuesday, April 28, 2009

Unemployment and economic freedom

Earlier this year the Mercatus Center at George Mason University released a ranking of the economic freedom of the 50 states. Economic freedom is defined as the implementation of free market policies such as low taxes and spending and minimal regulation.

The top 5 were:
1. South Dakota
2. New Hampshire
3. Colorado
4. North Dakota
5. Idaho
The bottom 5, meanwhile, were:
46. New Jersey
47. Alaska
48. California
49. Maine
50. New York
Now, using google's brand new public data graphing tool, let's take a look at how the unemployment rates of those states with the most economic freedom fare against the national average:


As you can see, every one of them is at least one percentage point below the national average. Now let's look at those with the least amount of economic freedom:


In this case two of them are above the national average while the other three are within 1 percentage point.

This would seem to suggest a certain course of action as the federal government ponders strategies to reduce unemployment in the country. Unfortunately the Obama Administration seems to be taking economic policy in the opposite direction.

4 comments:

Paradigm Shifter said...

Colin, how do I get my hands on the raw unemployment data by state? I would love to do some statistical analysis on those numbers and the freedom index in an attempt to quantify the impact.

Colin said...

Well, Google gets it from the Bureau of Labor Statistics, so you might want to start there. I'd love to see whatever you come up with.

Paradigm Shifter said...

OK. I was just perusing your site and saw the awesome data. I will try and dig some in the next 24-48 hours and let you know what I find/analyze.

Paradigm Shifter said...

My statistical analysis of the data is posted at the link below. Thanks for turning me on to it. This stuff is a personal passion of mine, and I was glad to be able to not only show a statistically significant gap between the bottom and top 5 states, but to show it was likely 1.6 points!

http://tiny.cc/zlw3F