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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
  • Laura Stanley
Article

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 

JEL Classification

D31 I32 J38 K20 R10 

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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  • Dustin Chambers
    • 1
    • 2
  • Patrick A. McLaughlin
    • 3
  • Laura Stanley
    • 1
  1. 1.Mercatus Center at George Mason UniversityArlingtonUSA
  2. 2.Salisbury UniversitySalisburyUSA
  3. 3.Mercatus Center at George Mason UniversityArlingtonUSA

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