A new study commissioned by the U.S. Chamber of Commerce finds that improving regulatory environments in states would boost new job and new business creation.

The study released by the Chamber’s Workforce Freedom Initiative and conducted by Seyfarth Shaw LLP and Navigant Economics rated states on labor and employment policies using an Employment Regulation Index (ERI). ERI categories included the employment relationship and the cost of separation; minimum wage and living wage laws; unemployment insurance and workers compensation; wage and hour policies; collective bargaining issues; and the litigation/enforcement climate. Within those broad categories, 34 individual policy areas were examined.

States were sorted into one of three tiers: good, fair, or poor, to reflect their overall regulatory environment. Fifteen states are in the “good” category, 20 in the “fair” category, and 15 in the “poor” category. An econometric analysis performed by Navigant measured the impact of a state’s ERI ranking on two key economic variables: the unemployment rate and new business formation.

Based on those findings, the Chamber says regulatory reform could result in a one-time increase of 746,462 jobs nationwide as well as a 12% increase in the formation of new businesses.

“Without cost to state governments or the federal government — or the taxpayers — states can take steps now to improve their economic conditions and begin to prime the pump of job creation and new business formation,” said Lisa Rickard, president of the Initiative. “The goal of this study is to provide state policymakers with an objective view of how policies in their states compare with policies in other states, and perhaps more importantly, how reforms can accelerate economic growth.”

“In interpreting the ERI and the overall state rankings, it is important to note that achieving a “perfect” score on the ERI does not mean a lack of regulation in the labor and employment contexts and the study does not advocate for such an outcome,” according to a Chamber press release. “Federal law, for example, provides a multitude of workplace standards on its own.”