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Gigi M. Alexander and Richard J. Cebula

Using data on U.S. states, this empirical chapter looks at the impact of labor market freedom on the male labor force participation rate. Using data from the Economic Freedom of North America index in 2010, we find preliminary empirical support for the hypothesis that greater labor market freedom elevates the male labor force participation rate. A one unit increase in labor market freedom is estimated to lead to a 2.51 percent increase in the male labor market participation rate in that state. In addition, we find that greater annual earnings for men by state create an incentive to enter the labor force.