State RegData

BY: Dustin Chambers, Patrick A. McLaughlin and Laura Stanley
DATE: October 30, 2018

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."

BY: Patrick A. McLaughlin and Tyler Richards
DATE: November 12, 2019

ABSTRACT: “All regulations, however well intended, create unintended consequences. Regulatory accumulation (that is, the buildup of rules over time) leads to slower economic growth and fewer small businesses, and it deepens wealth inequality as the burden of regulatory accumulation is disproportionately borne by low-income households. Furthermore, organizational and political incentives inherent to bureaucracies lead regulators to tirelessly create new rules while paying little attention to past regulations that are outdated, overlapping, or simply ineffective—not to mention that they rarely address the general growing mass of regulations. Addressing this excessive regulatory accumulation by identifying and removing costly regulations as well as limiting regulatory growth to only the most beneficial regulations would be a significant step in managing the social costs of regulations."

BY: Dustin Chambers, Diana Thomas, Patrick A. McLaughlin, and Kathryn Waldron
DATE: January 8, 2019

ABSTRACT: “Regulation dictates the lives of ordinary American citizens in a myriad of ways. Although most regulation is created with the intention of protecting people from possible dangers, it can have the reverse effect. Even regulation that focuses on consumer, workplace, and environmental protection has economic costs, as it requires businesses to hire additional staff to navigate the legal landscape, among other costs. Even more worryingly, red tape can also discourage outside companies from entering more heavily regulated industries in the future."

BY: Patrick A. McLaughlin, Jerry Ellig, and Dima Yazji Shamoun
DATE: March 18, 2014

ABSTRACT: “As the quantity and scope of regulations in Florida grow, so does the degree to which they affect the economy. In these circumstances, a little reform to the process of creating regulations can go a long way toward crafting an environment that fosters competitiveness and economic efficiency. This paper proposes two simple yet effective regulatory reforms that Florida could adopt to make new regulations more economically efficient. First, before designing a regulation, regulators should define the problem the regulation is supposed to address, which should include determining whether a widespread and systemic problem exists and identifying its causes. Second, once a problem has been identified, regulators should consider a wide range of alternatives before selecting a course of action. Both suggested reforms could be usefully applied to all regulatory actions, thereby improving Florida’s competitiveness and helping to prevent unnecessary regulatory burdens to its economy."

BY: Patrick A. McLaughlin, Oliver Sherouse
DATE: January 21, 2016

“Federal regulation is applicable in the same way in all 50 states. Each state’s economy, however, includes a unique mix of industries, so federal policies that target specific sectors of the economy will affect states in different ways…By weighting industry restrictions using the importance of an industry to a state relative to its importance to the country overall, we can produce a single Federal Regulation and State Enterprise (FRASE) index that measures the impact of federal regulation on individual states. The index is thus a ratio of the impact of federal regulations on a specific state’s industries to the impact of federal regulations on the nation’s industries in a given year. A value of 1 would indicate that a state’s private sector is affected by federal regulations to exactly the same degree as the national private sector, while a score higher than 1 would indicate a higher impact of federal regulation on a state’s private sector.

For 2013, Kentucky scored a 1.30 on the FRASE index. By design, the FRASE index for the United States overall in any year will equal 1, so a score of 1.30 indicates that the impact of federal regulation on Kentucky’s industries was about 30 percent higher than the impact on the nation overall."

BY: Patrick A. McLaughlin, Oliver Sherouse
DATE: January 21, 2016

“Federal regulation is applicable in the same way in all 50 states. Each state’s economy, however, includes a unique mix of industries, so federal policies that target specific sectors of the economy will affect states in different ways…By weighting industry restrictions using the importance of an industry to a state relative to its importance to the country overall, we can produce a single Federal Regulation and State Enterprise (FRASE) index that measures the impact of federal regulation on individual states. The index is thus a ratio of the impact of federal regulations on a specific state’s industries to the impact of federal regulations on the nation’s industries in a given year. A value of 1 would indicate that a state’s private sector is affected by federal regulations to exactly the same degree as the national private sector, while a score higher than 1 would indicate a higher impact of federal regulation on a state’s private sector.

For 2013, Massachusetts scored a 0.77 on the FRASE index. By design, the FRASE index for the United States overall in any year will equal 1, so a score of 0.77 indicates that the impact of federal regulation on Massachusetts’s industries was more than 20 percent lower than the impact on the nation overall.”

BY: Patrick A. McLaughlin, Oliver Sherouse
DATE: January 21, 2016

“Federal regulation is applicable in the same way in all 50 states. Each state’s economy, however, includes a unique mix of industries, so federal policies that target specific sectors of the economy will affect states in different ways…By weighting industry restrictions using the importance of an industry to a state relative to its importance to the country overall, we can produce a single Federal Regulation and State Enterprise (FRASE) index that measures the impact of federal regulation on individual states. The index is thus a ratio of the impact of federal regulations on a specific state’s industries to the impact of federal regulations on the nation’s industries in a given year. A value of 1 would indicate that a state’s private sector is affected by federal regulations to exactly the same degree as the national private sector, while a score higher than 1 would indicate a higher impact of federal regulation on a state’s private sector.

For 2013, Nevada scored a 0.82 on the FRASE index. By design, the FRASE index for the United States overall in any year will equal 1, so a score of 0.82 indicates that the impact of federal regulation on Nevada’s industries was almost 20 percent lower than the impact on the nation overall.”

BY: Patrick A. McLaughlin, Oliver Sherouse
DATE: January 21, 2016

“Federal regulation is applicable in the same way in all 50 states. Each state’s economy, however, includes a unique mix of industries, so federal policies that target specific sectors of the economy will affect states in different ways…By weighting industry restrictions using the importance of an industry to a state relative to its importance to the country overall, we can produce a single Federal Regulation and State Enterprise (FRASE) index that measures the impact of federal regulation on individual states. The index is thus a ratio of the impact of federal regulations on a specific state’s industries to the impact of federal regulations on the nation’s industries in a given year. A value of 1 would indicate that a state’s private sector is affected by federal regulations to exactly the same degree as the national private sector, while a score higher than 1 would indicate a higher impact of federal regulation on a state’s private sector.

For 2013, Wyoming scored a 1.59 on the FRASE index. By design, the FRASE index for the United States overall in any year will equal 1, so a score of 1.59 indicates that the impact of federal regulation on Wyoming’s industries was almost 60 percent higher than the impact on the nation overall.”

BY: Patrick A. McLaughlin, Matthew D. Mitchell, Anne Philpot, and Thomas Snyder
DATE: September 25, 2017

“When a state imposes licensing rules on an occupation, workers cannot legally practice that trade without fulfilling a set of requirements. Occupational licensing is presumably intended to protect the public from unsafe and low-quality service. But a broad and growing consensus among economists suggests that these rules primarily serve to protect incumbent providers from competition at the cost of higher consumer prices and excessive barriers for new entrants in the field. Despite the common perception, licensing rules are not shown to improve service quality or safety. In this policy brief, we focus on occupational licensing in the state of Arkansas. This state has some of the most burdensome license requirements in the United States. We discuss the economic effects of licensure, and we draw a roadmap for reform."

BY: Patrick A. McLaughlin, Matthew D. Mitchell, Anne Philpot, and Tamara Winter
DATE: September 25, 2017

“In many lines of work, those who enter the field must first obtain a government-issued license. In order to obtain a license, prospective licensees may be required to take tests, pay fees, undergo certain training, or fulfill other requirements such as residency, age, or education. Occupational licensing is ostensibly intended to protect the public from unsafe and low-quality service. But a broad and growing consensus among economists suggests that these rules mostly serve to protect incumbent providers from competition, raising consumer prices without improving quality and limiting opportunities for new entrants in the field. In this policy brief, we focus on occupational licensing in the state of Wisconsin and put that state’s practices into the broader context of existing economic research."

BY: Patrick A. McLaughlin, Matthew D. Mitchell, Anne Philpot, and Tamara Winter
DATE: May 14, 2018

“When a state imposes licensing rules on an occupation, workers cannot legally practice that trade without fulfilling a set of requirements. When a state imposes certification rules on an occupation, noncertified workers can still legally practice their trade, but certification proves that those workers have met certain state-defined professional benchmarks. About a third of North Carolina’s workforce is licensed or certified. Occupational licensing is ostensibly intended to protect the public from unsafe and low-quality service, but there is little evidence this intention is realized. Rather, there is a growing consensus among economists that these rules serve to protect incumbent providers from competition by creating barriers for new entrants that lead to higher prices for consumers."

BY: Patrick A. McLaughlin, Matthew D. Mitchell, Anne Philpot, and Tamara Winter
DATE: March 26, 2018

“When a state imposes licensing rules on an occupation, workers cannot legally practice that trade without fulfilling a set of requirements. When a state imposes certification rules on an occupation, non-certified workers can still legally practice their trade, but certification proves that those workers have met certain state-defined professional benchmarks. About a third of Nevada’s workforce is licensed or certified. Occupational licensing is ostensibly intended to protect the public from unsafe and low-quality service, but there is little evidence that this intention is realized. Rather, there is a growing consensus among economists that these rules serve to protect incumbent providers from competition by creating barriers for new entrants, ultimately leading to higher prices for consumers.”

BY: Patrick A. McLaughlin, Matthew D. Mitchell, Anne Philpot, and Tamara Winter
DATE: January 3, 2018

“When a state imposes licensing rules on an occupation, workers cannot legally practice that trade without fulfilling a set of requirements. Nebraska requires about a third of its workforce to have a license or certification. Occupational licensing is ostensibly intended to protect the public from unsafe and low-quality service, but there is little evidence that this intention is realized. Rather, there is a growing consensus among economists that these rules serve to protect incumbent providers from competition by creating barriers for new entrants that lead to higher prices for consumers.”

BY: Patrick A. McLaughlin, Matthew D. Mitchell, Anne Philpot, and Tamara Winter
DATE: October 30, 2017

“When a state imposes licensing rules on an occupation, workers cannot legally practice that trade without fulfilling a set of requirements. Missouri requires about a quarter of its workforce to have a license or certification. Occupational licensing is ostensibly intended to protect the public from unsafe and low-quality service, but there is little evidence this intention is realized. Rather, there is a growing consensus among economists that these rules serve to protect incumbent providers from competition by creating barriers for new entrants that lead to higher prices for consumers.”

BY: Patrick A. McLaughlin, Matthew D. Mitchell, Anne Philpot, and Tamara Winter
DATE: February 28, 2018

“When a state imposes licensing rules on an occupation, workers cannot legally practice that trade without fulfilling a set of requirements. When a state imposes certification rules on an occupation, noncertified workers can still legally practice their trade, but certification acts as proof of those workers having met certain state-defined professional benchmarks. About a quarter of Michigan’s workforce is licensed or certified. Occupational licensing is ostensibly intended to protect the public from unsafe and low-quality service, but there is little evidence that this intention is realized. Rather, there is a growing consensus among economists that these rules serve to protect incumbent providers from competition by creating barriers for new entrants, ultimately leading to higher prices for consumers.”

BY: Patrick A. McLaughlin, Matthew D. Mitchell, and Andrew M. Baxter
DATE: June 19, 2017

“Occupational licensing is ostensibly intended to protect the public from unsafe and low-quality service. But a broad and growing consensus among economists suggests that these rules mostly serve to protect incumbent providers from competition, raising consumer prices and limiting opportunities for new entrants in the field without improving quality. In this policy brief, we focus on occupational licensing in the state of Illinois and put that state’s practices into the broader context of existing economic research.”