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Minnesota ranked 48th in economic freedom index, last in Midwest

(The Center Square) – A Canadian think tank ranked Minnesota 48th out of the 50 states on a national economic freedom index.

The Fraser Institute’s “Economic Freedom of North America in 2021,” is the 17th edition of a report measuring economic freedom in 2019. Using 10 variables, including government spending, taxes, and labor market freedom, it ranked North American states and provinces on a scale from zero to 10.

The report uses two indices to compare jurisdictions in both the same and different countries. In the all-government section, the report factors in the legal systems and property rights, sound money policies, and freedom of international trade.

States and provinces’ scores in each subcomponent are averaged to reach an overall score.

The freest state in the nation is New Hampshire, followed by Florida and Idaho.

Minnesota ranked 48th in the nation and dead last among Midwest states. Indiana (9th) scored the freest of the 12 Midwest states, followed by North Dakota (12th), South Dakota (14th), Kansas (20th), and Iowa (22nd). Michigan and Nebraska tied at 23rd, with the Wolverine State advancing eight spots from last year’s report. Wisconsin (25th) beat out Missouri (30th), Illinois (35th), and Ohio (43rd).

Delaware came in dead last in the nation.

The study shows that people who live in states and areas with higher levels of economic freedom often receive higher incomes.

The economic index matters because previous studies have analyzed the relationship between economic freedom and well-being measured by income and economic growth.

A study published in Contemporary Economic Policy linked economic freedom to higher levels of economic growth and income.

The researchers found evidence of a pattern in real per‐capita gross state product (GSP) that affects the freedom‐income relationship.

“Taking into account the direct and indirect effects of economic freedom on real per‐capita GSP, we find a 10% increase in economic freedom is associated with a 5% increase in real per‐capita GSP,” they wrote.

This figure breaks all North American states and provinces measured into quartiles of economic freedom to show the disparity of per-capita income.

2021 Michigan economic freedom index

A Fraser Institute Graph showing income level per capita in Canada, the US, and Mexico in 2019. 

“The results of the experiments of the twentieth century should now be clear: free economies produce the greatest prosperity in human history for their citizens,” the study said. “Even poverty in these economically free nations would have been considered luxury in unfree economies.”


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