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Growth and Convergence across the United States: Evidence from County-Level Data

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Author Info

  • Matthew J. Higgins

    (Georgia Institute of Technology)

  • Daniel Levy

    (Bar-Ilan University)

  • Andrew T. Young

    (University of Mississippi)

Abstract

We use U.S. county data (3,058 observations) and 41 conditioning variables to study growth and convergence. Using ordinary least squares (OLS) and three-stage least squares with instrumental variables (3SLS-IV), we report on the full sample and metro, nonmetro, and and regional samples: (1) OLS yields convergence rates around 2%; 3SLS yields 6%-8%; (2) convergence rates vary (for example, the Southern rate is 2.5 times the Northeastern rate); (3) federal, state, and local government negatively correlates with growth; (4) the relationship between educational attainment and growth is nonlinear; and (5) the finance, insurance, and real estate industry and the entertainment industry correlate positively with growth, whereas education employment correlates negatively. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Bibliographic Info

Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 88 (2006)
Issue (Month): 4 (November)
Pages: 671-681

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Handle: RePEc:tpr:restat:v:88:y:2006:i:4:p:671-681

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Web page: http://mitpress.mit.edu/journals/

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Cited by:
  1. Chris Forman & Avi Goldfarb & Shane Greenstein, 2012. "The Internet and Local Wages: A Puzzle," American Economic Review, American Economic Association, vol. 102(1), pages 556-75, February.
  2. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2009. "Temperature and Income: Reconciling New Cross-Sectional and Panel Estimates," American Economic Review, American Economic Association, vol. 99(2), pages 198-204, May.
  3. James, Alex & Aadland, David, 2011. "The curse of natural resources: An empirical investigation of U.S. counties," Resource and Energy Economics, Elsevier, vol. 33(2), pages 440-453, May.
  4. Graziella Bertocchi & Arcangelo Dimico, 2011. "The Evolution of the Racial Gap in Education and the Legacy of Slavery," Department of Economics 0672, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
  5. Young, Andrew & Higgins, Matthew & Levy, Daniel, 2007. "Black Populations and Economic Growth: An Extreme Bounds Analysis of Mississippi County-Level Data," MPRA Paper 1646, University Library of Munich, Germany.
  6. Ramírez, Carlos D., 2009. "Bank fragility, "money under the mattress", and long-run growth: US evidence from the "perfect" Panic of 1893," Journal of Banking & Finance, Elsevier, vol. 33(12), pages 2185-2198, December.
  7. Hasan, Iftekhar & Koetter, Michael & Wedow, Michael, 2009. "Regional growth and finance in Europe: Is there a quality effect of bank efficiency?," Journal of Banking & Finance, Elsevier, vol. 33(8), pages 1446-1453, August.
  8. Cheong, Tsun Se & Wu, Yanrui, 2013. "Regional disparity, transitional dynamics and convergence in China," Journal of Asian Economics, Elsevier, vol. 29(C), pages 1-14.
  9. Mercedes Delgado & Michael Porter & Scott Stern, 2010. "Clusters, Convergence, and Economic Performance," Working Papers 10-34, Center for Economic Studies, U.S. Census Bureau.
  10. M. Yazgan & Hakan Yilmazkuday, 2009. "Okun’s convergence within the US," Letters in Spatial and Resource Sciences, Springer, vol. 2(2), pages 109-122, October.
  11. Badi H. Baltagi & Bernard Fingleton & Alain Pirotte, 2013. "Spatial Lag Models with Nested Random Effects: An Instrumental Variable Procedure with an Application to English House Prices," Center for Policy Research Working Papers 161, Center for Policy Research, Maxwell School, Syracuse University.
  12. Chris Forman & Avi Goldfarb & Shane Greenstein, 2009. "The Internet and Local Wages: Convergence or Divergence?," NBER Working Papers 14750, National Bureau of Economic Research, Inc.
  13. Rodney Ramcharan, 2010. "Inequality and Redistribution: Evidence from U.S. Counties and States, 1890-1930," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 729-744, November.
  14. Ratna, Nazmun N. & Quentin Grafton, R. & Kompas, Tom, 2009. "Is diversity bad for economic growth?: Evidence from state-level data in the US," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(6), pages 859-870, December.
  15. Bertocchi, Graziella & Dimico, Arcangelo, 2012. "The racial gap in education and the legacy of slavery," Journal of Comparative Economics, Elsevier, vol. 40(4), pages 581-595.
  16. Kosei Fukuda, 2012. "Population growth and local public finance in Japanese cities," Applied Economics, Taylor & Francis Journals, vol. 44(15), pages 1941-1949, May.
  17. Hammond, George W. & Tosun, Mehmet S., 2009. "The Impact of Local Decentralization on Economic Growth: Evidence from U.S. Counties," IZA Discussion Papers 4574, Institute for the Study of Labor (IZA).

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