Sunday, July 07, 2013

Making it easier to fire people means more people get hired

Kind of counter intuitive in a way, but also not really - after all, employers put off hiring because they worry about having to fire them if they don't work out for cultural reasons let alone regulatory ones (DivisionofLabour via AdamSmith):

Using 1981–2009 data for the 50 states, this article examines the relationship between economic freedom and the unemployment rate, the labor force participation rate, and the employment-population ratio. After controlling for a variety of state-level characteristics, the results from most specifications indicate that economic freedom is associated with lower unemployment and with higher labor force participation and employment-population ratios.

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