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Convergence of Income across Pennsylvania Counties

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  • David A. Latzko

    ()
    (Pennsylvania State University at York)

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    Abstract

    The neoclassical growth model implies that if two economies have the same preferences and technology, the poorer country will tend to grow faster in per capita terms. The relatively homogeneous counties of Pennsylvania provide an excellent test of the model's convergence predictions. There is no evidence of absolute convergence of income levels among Pennsylvania counties. The divergence between the very highest and very lowest income counties is due to changes in relative county wages. I utilize a set of panel data to properly account for individual effects, and find a conditional convergence rate of 2 percent.

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    File URL: http://college.holycross.edu/RePEc/eej/Archive/Volume28/V28N4P499_508.pdf
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    Bibliographic Info

    Article provided by Eastern Economic Association in its journal Eastern Economic Journal.

    Volume (Year): 28 (2002)
    Issue (Month): 4 (Fall)
    Pages: 499-508

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    Handle: RePEc:eej:eeconj:v:28:y:2002:i:4:p:499-508

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    Web page: http://www.ramapo.edu/eea/journal.html
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    Keywords: Wage;

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    1. Paul M. Romer, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter.
    2. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
    3. Robert J. Barro & N. Gregory Mankiw & Xavier Sala-i-Martin, 1992. "Capital Mobility in Neoclassical Models of Growth," NBER Working Papers 4206, National Bureau of Economic Research, Inc.
    4. Paul Evans, 1997. "How Fast Do Economies Converge?," The Review of Economics and Statistics, MIT Press, vol. 79(2), pages 219-225, May.
    5. repec:chb:bcchwp:03 is not listed on IDEAS
    6. Barro, R.J., 1989. "Economic Growth In A Cross Section Of Countries," RCER Working Papers 201, University of Rochester - Center for Economic Research (RCER).
    7. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. " Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-89, September.
    8. Lee, Kevin & Pesaran, M Hashem & Smith, Ron, 1997. "Growth and Convergence in Multi-country Empirical Stochastic Solow Model," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(4), pages 357-92, July-Aug..
    9. Dowrick, Steve & Nguyen, Duc-Tho, 1989. "OECD Comparative Economic Growth 1950-85: Catch-Up and Convergence," American Economic Review, American Economic Association, vol. 79(5), pages 1010-30, December.
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    Cited by:
    1. Gyawali, Buddhi Raj & Fraser, Rory & Banerjee, Ban & Bukenya, James O., 2009. "Income Convergence and Growth in Alabama: Evidence from Sub-county Level Data," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46713, Southern Agricultural Economics Association.

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