VANCOUVER, British Columbia, Aug. 31, 2021 (GLOBE NEWSWIRE) -- The costs of government regulation, including labour regulations such as licencing and accreditation, represent a real barrier for workers—especially low-income workers—trying to move up the income ladder, finds a new study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
“Government regulations impede the ability of workers to make themselves better off by slowing the upward mobility of workers,” said Vincent Geloso, an assistant professor of economics at George Mason University, senior fellow at the Fraser Institute and co-author of Economic Freedom Promotes Upward Income Mobility.
For example, government regulation of many industries requires workers to purchase occupational licences or train to acquire credentials before they can work. This takes time and money, which low-income people may not possess, creating a barrier that prevents them from more fully participating and advancing in the labour market.
Consequently, the study notes, general employment regulations across industries slow wage growth for low-income workers. And particularly, occupational licencing tends to hurt income growth among the poor more than among higher-income workers.
The same effect is also observed for would-be entrepreneurs who face barriers to entering certain industries because of regulatory costs and fees.
The study, part of the upcoming Economic Freedom of the World, 2021 report that will be released later this year, shows that increased levels of Economic Freedom lead to greater income mobility.
The Fraser Institute produces the annual Economic Freedom of the World report in cooperation with the Economic Freedom Network, a group of independent research and educational institutes in nearly 100 countries and territories. It’s the world’s premier measurement of economic freedom.
“If governments are genuine in their desire to help low-income workers climb the income ladder during the COVID recovery and beyond, they should take a second look at regulations and look for ways to increase economic freedom in their respective jurisdictions,” Geloso said.
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Vincent Geloso, Senior Fellow, Fraser Institute
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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of think-tanks in 87 countries. Its mission is to improve the quality of life for Canadians, their families and future generations by studying, measuring and broadly communicating the effects of government policies, entrepreneurship and choice on their well-being. To protect the Institute’s independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org
