Migration, Economic Freedom, and Personal Freedom: An Empirical Analysis

Article excerpt

Abstract

Economic freedom increases market efficiency, growth, development, and individual prosperity. This study empirically investigates whether higher levels of economic freedom, as well as higher levels of personal freedom, act like magnets for persons residing in a free society to move. In other words, do the prospects of both greater economic and personal freedom in any given state vis-à-vis other states act to induce a greater influx of migrants? This empirical study of domestic migration between 2000 and 2008 finds clear evidence that migrants prefer to move to those states with greater economic freedom on the one hand and greater personal freedom on the other hand.

JEL Codes: P10, 12, O12

Keywords: Migration; Economic freedom; Personal freedom; Growth

I. Introduction

Greater economic and personal/political freedoms are conducive to a private enterprise environment that promotes greater economic development and growth. Indeed, these freedoms promote private enterprise in a variety of ways, and Ashby (2010) demonstrated that both economic and political freedom are significant determinants of migration between countries. Furthermore, the greater the success of freedom in promoting private enterprise, the greater the degree to which higher living standards, higher economic growth, and more extensive economic development are manifested (Ali, 1997; Cole, 2003; Dawson, 2003; Farr, Lord, and Wolfenbarger, 1998; Goldsmith, 1995).

The economic history of the United States essentially began with the immigration of people, principally from Europe, in search of freedom, with freedom broadly interpreted to include religious freedom along with other forms of freedom. Arguably, the Revolutionary War was primarily based on a quest for greater political, personal, and economic freedom, and today the media abounds with examples of the extreme lengths to which individuals will go to gain those freedoms. Every day large numbers of illegal immigrants risk life and fortune, with significant numbers dying in the process, to cross international borders in search of a better life.

Freedom also significantly affects the decision to migrate between and among states. For example, as America was being settled and becoming home to increased numbers of persons seeking freedom in one form or another, movement to the West increased. After the Civil War, whose roots included varying perspectives on the issues of economic freedom (such as tariffs) and personal and political freedom (including slavery), migration to the West assumed greater proportions, initially taking the form of "pioneers" joining wagon trains and later promoted by the building of the railroad system into the West. The prospects of becoming economically independent and successful in an environment characterized by economic freedom and private enterprise such that one could reap the rewards of one's hard work, risk-taking, and ingenuity was a powerful magnet for both descendants of immigrants and to some degree even new immigrants to move to the West. Thus, historically, it appears that both immigration to the United States and subsequent internal migration across the United States, which itself was expanding its borders and influence to the Pacific, ultimately under the banner of "manifest destiny," was intimately linked to the interrelated phenomena of economic, personal, and political freedom and private enterprise (Vedder, 1976).

Migration determinants within the United States have been extensively researched, especially for the post World War II era (Percy, Hawkins, and Maier, 1995; Carrington, Detragiache, and Vishwanath, 1996; Nechyba, 2000; Conway and Houtenville, 1998, 2001; Chi and Voss, 2005; Cebula and Alexander, 2006; Partridge and Rickman, 2006; Francis, 2007; Landry et al., 2007; Schoolland, 2004; Subrick, Heap, and Mitchell, 2009). This continued research into migration can be attributed to a variety of factors, including concerns about gain or loss of tax base; increases or decreases in the demand for public schools, water and sewerage systems, and other public services; the identification of locations with better employment opportunities or better company expansion opportunities; and the shift in political power resulting from emerging internal migration patterns. …