A new study by U.S. Chamber of Commerce’s Workforce Freedom Initiative reveals that states that impose the heaviest labor and employment regulatory burdens are sacrificing opportunities to reduce their unemployment rate and generate new business startups.

The study conducted by Seyfarth Shaw LLP and Navigant Economics shows that if each state were to improve their regulatory climates to the level discussed in the report, the effect would be equivalent to a one-time boost of 746,462 net new jobs nationwide. Moreover, the rate of new business formation would increase by 12%, resulting in the creation of 51,590 new firms nationally each year. Reducing the burden of labor and employment regulation in the states could act as a free shot of economic stimulus — equal to approximately seven months of job creation at the current average rate.

Speaking at March 2 Chamber event to unveil the study, Gov. Haley Barbour (R-Mississippi) said that avoiding the layering of state labor and employment regulations on top of federal regulations and focusing on working training has made Mississippi attractive to business investment.

“We did make a real focus on our workforce and our working people and it has had a very positive impact,” Barbour said. Under Barbour, state revenues have increased by about 40% without tax hikes “More taxpayers equal more taxable income.”

By not piling burdensome state regulations on top of federal rules, Mississippi has attracted new investment, according to Gov. Haley Barbour.

Mississippi’s better, high-skilled workforce has drawn more high-end manufacturers to the state, including General Electric, Toyota, and Severstal, a Russian steelmaker. “We have learned if you believe in manufacturing—which we in Mississippi do—and you focus on advanced manufacturing in automotives, aircraft, shipbuilding, etc., then improving the quality of workforce is critical to job creation.”

WFI’s index looks at 34 measures of state labor and employment policies in six categories: (1) The Employment Relationship and the Costs of Separation; (2) Minimum Wage and Living Wage Laws; (3) Unemployment Insurance and Workers’ Compensation; (4) Wage and Hour Policies; (5) Collective Bargaining Issues; and (6) the Litigation/Enforcement Climate.

The four states with the largest potential for job creation, according to the index authors, are California, Illinois, New York and Pennsylvania. The states with the best employment policies include states like Florida, Mississippi, South Dakota, Texas, and Virginia.