Advanced Search
MyIDEAS: Login to save this paper or follow this series

Unbalanced Productivity Growth in US States: Evidence from Factor Prices

Contents:

Author Info

  • Areendam Chanda

    ()

  • Bibhudutta Panda

    ()

Abstract

Despite being located within a well integrated economy such as the US, its states exhibit considerable heterogeneity, both in the composition of output and in sectoral labor productivity growth. In this paper, we examine the sources of uneven labor productivity growth across sectors in US states. In particular, we use the dual growth accounting framework to compare the relative roles of multi-factor productivity growth and factor accumulation in goods versus services from 1980 to 2007. We find that states exhibit a wide range of productivity growth rates with the goods sector showing much larger gaps. Underlying these gaps are large variations in wage growth and real user cost growth. Since 1998, the real user cost declines at almost two per cent annually. Incorporating human capital into the analysis makes wage growth and, hence, productivity growth lower, and on average negative in the last ten years. Scaling up the analysis to the national level, we also find that there are large differences between the growth rates of primal based measures of marginal product of capital and our calculations of real user cost growth. The anomalous behavior of particular industries such as mining and real estate services, and the declining relative price of investment goods can only partially explain these patterns..

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://bus.lsu.edu/McMillin/Working_Papers/pap12_04.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Department of Economics, Louisiana State University in its series Departmental Working Papers with number 2012-04.

as in new window
Length:
Date of creation:
Date of revision:
Handle: RePEc:lsu:lsuwpp:2012-04

Contact details of provider:
Postal: Baton Rouge, LA 70803-6306
Fax: 225-578-3807
Email:
Web page: http://www.business.lsu.edu/economics
More information through EDIRC

Related research

Keywords:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Shekhar Aiyar & Carl-Johan Dalgaard, 2004. "Total Factor Productivity Revisited: A Dual Approach to Development Accounting," EPRU Working Paper Series, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics 04-07, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  2. Margarida Duarte & Diego Restuccia, 2007. "The Role of the Structural Transformation in Aggregate Productivity," Working Papers tecipa-300, University of Toronto, Department of Economics.
  3. Andersen, Thomas Barnebeck & Bentzen, Jeanet & Dalgaard, Carl-Johan & Selaya, Pablo, 2011. "Lightning, IT diffusion and economic growth across US states," Discussion Papers of Business and Economics 2/2011, Department of Business and Economics, University of Southern Denmark.
  4. Henderson, Daniel J. & Polachek, Solomon & Wang, Le, 2011. "Heterogeneity in Schooling Rates of Return," IZA Discussion Papers 5662, Institute for the Study of Labor (IZA).
  5. Todd Schoellman & Sean Mulholland & Robert Tamura & Chad Turner, 2010. "How Important are Human Capital, Physical Capital and Total Factor Productivity for Determining State Economic Growth in the United States, 1840-2000," 2010 Meeting Papers 839, Society for Economic Dynamics.
  6. Gasper A. Garofalo & Steven Yamarik, 2002. "Regional Convergence: Evidence From A New State-By-State Capital Stock Series," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 316-323, May.
  7. Sebnem Kalemli-Ozcan & Ariell Reshef & Bent E Sørensen & Oved Yosha, 2010. "Why Does Capital Flow to Rich States?," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 769-783, November.
  8. Robert S. Chirinko & Daniel J. Wilson, 2007. "State Investment Tax Incentives: A Zero-Sum Game?," CESifo Working Paper Series 1895, CESifo Group Munich.
  9. Douglas Gollin, 2001. "Getting Income Shares Right," Department of Economics Working Papers 2001-11, Department of Economics, Williams College.
  10. Holtz-Eakin, Douglas, 1993. "Solow and States: Capital Accumulation, Productivity, and Economic Growth," National Tax Journal, National Tax Association, vol. 46(4), pages 425-39, December.
  11. Dean Baker, 2007. "Behind the Gap Between Productivity and Wage Growth," CEPR Reports and Issue Briefs, Center for Economic and Policy Research (CEPR) 2007-05, Center for Economic and Policy Research (CEPR).
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:lsu:lsuwpp:2012-04. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.