Economic freedom, the minimum wage, and food insecurity

Abstract

AbstractEconomic freedom, a measure of the degree of freedom from government intervention in the economy, has been found to be associated with many positive economic outcomes, such as lower unemployment rates, and higher growth of income, employment, and population. One area that remains unexplored is the relationship with food insecurity. Areas with more government intervention may be expected to have higher food insecurity because those interventions can create greater impediments to people's ability to prosper economically. One specific example of that is the minimum wage, which may make it harder for inexperienced low‐skilled workers to obtain employment. We provide the first state‐level examination of the relationship between food insecurity and economic freedom and find higher values of economic freedom (lower levels of intervention) are associated with lower food insecurity. We also examine one specific component of that economic freedom measure, the minimum wage, and find some limited evidence that higher minimum wages are associated with higher food insecurity.