A distributional analysis of the benefits of economic freedom

- We examine the effects of economic freedom across the income distribution.
- We find that the benefits of economic freedom are not equal across income quintiles.
- The lowest income quintile often does not benefit from increases in economic freedom.
- We also find that not all types of economic freedom affect incomes similarly.

Using US state-level economic freedom measures, we investigate the extent that changes in economic freedom affect US State income growth. More importantly, we study how this effect differs across income quintiles, allowing us to address the particularly timely question of who benefits from increases in economic freedom and who does not. Our results indicate that while increases in economic freedom positively contribute to income growth, the strength of this effect differs across quintiles.