“Past research concluded that economic freedom spurs prosperity, income, employment and better public institutions
People living in countries with high levels of economic freedom are happier and have greater life s
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TORONTO—Countries with higher levels of economic freedom have happier populations, finds a new study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
“There’s a direct link between a country’s level of economic freedom and its citizens’ life satisfaction, or happiness. Clearly, living in an economically free society has an important impact on the average citizen,” said Fred McMahon, the Fraser Institute’s Dr. Michael A. Walker Research Chair in Economic Freedom.
The research paper, Economic Freedom, Individual Perceptions of Life Control and Life Satisfaction, employs data from the World Values Survey, European Values Studies and the Fraser Institute’s Economic Freedom of the World Annual Report which uses 42 distinct variables to rank countries around the world based on policies that encourage economic freedom.
The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete, and security of private property. Economic freedom is measured in five different areas: (1) size of government, (2) legal structure and security of property rights, (3) access to sound money, (4) freedom to trade internationally, and (5) regulation of credit, labour, and business.
The analysis shows that living in an economically free country plays a greater role in one’s life satisfaction than does income, age, employment or even a country’s political system.
The study finds that economic freedom and life satisfaction are linked in two ways. First, there’s a direct correlation: Simply put, happiness derived from living in an economic free country is inherently valued. Secondly, economic freedom gives individuals the feeling of being more control of their own lives.
“If you live in a country where you can freely trade with others, choose your occupation, enter freely into business and keep more of what you earn, then you’re going to feel like you have control of your future which in turn is going to make you happier,” said Martin Rode, essay co-author and professor of economics at Universidad de Navarra.
“Past research concluded that economic freedom spurs prosperity, income, employment and better public institutions. The finding that economic freedom plays a significant role in individual life satisfaction is just another reason for governments around the world to work towards greater economic freedom for their people,” McMahon said.