This paper provides an exploratory analysis into factors contributing to differences across states in recidivism rates. We provide the first such examination that incorporates differences in economic freedom. Using a panel data set from 1998 to 2010, we find that higher levels of economic freedom within a state are associated with lower recidivism rates within that state. A one percent increase in state economic freedom is associated with a 0.47 % decrease in parolee recidivism. The relationship is stronger and more statistically significant for labor market freedom, with a one percent increase in labor market freedom being associated with a 0.67 % decline in recidivism.
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