Regulation and poverty: an empirical examination of the relationship between the incidence of federal regulation and the occurrence of poverty across the US states

Dustin Chambers (), Patrick A. McLaughlin () and Laura Stanley ()
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Dustin Chambers: Mercatus Center at George Mason University
Patrick A. McLaughlin: Mercatus Center at George Mason University
Laura Stanley: Mercatus Center at George Mason University

Public Choice, 2019, vol. 180, issue 1, No 8, 144 pages

Abstract: Abstract We estimate the impact of federal regulations on poverty rates in the 50 US states using the recently created Federal Regulation and State Enterprise (FRASE) index, which is an industry-weighted measure of the burden of federal regulations at the state level. Controlling for many other factors known to influence poverty rates, we find a robust, positive and statistically significant relationship between the FRASE index and poverty rates across states. Specifically, we find that a 10% increase in the effective federal regulatory burden on a state is associated with an approximate 2.5% increase in the poverty rate. This paper fills an important gap in both the poverty and the regulation literatures because it is the first one to estimate the relationship between the two variables. Moreover, our results have practical implications for federal policymakers and regulators because the greater poverty that results from additional regulations should be considered when weighing the costs and benefits of additional regulations.

Keywords: Regulation; Poverty; States; FRASE; Regressive effects; RegData (search for similar items in EconPapers)
JEL-codes: D31 I32 J38 K20 R10 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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DOI: 10.1007/s11127-018-0603-8

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