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How important are human capital, physical capital and total factor productivity for determining state economic growth in the United States: 1840-2000?

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  • Turner, Chad
  • Tamura, Robert
  • Mulholland, Sean

Abstract

This paper creates a new data set on physical capital at the state level for the United States from 1840 - 2000. Combining these new data with state level human capital and output data enables us to estimate the contribution of aggregate input growth and total factor productivity (TFP) growth to output growth across states from 1840 - 2000, and to decompose the cross-sectional variance of output growth into the component explained by variation in aggregate inputs and the compenent explained by variation in TFP. As our data are across states instead of across countries, one would expect less institutional heterogeneity in this study than in studies using cross-country comparisons. We find that that 65% of average output growth from 1840 - 2000 is accounted for by average input growth. We find a plausible upper bound of output variation explained by TFP growth is 91%, while a plausible upper bound of output variation explained by input growth is 62%. Interestingly, even at the state level where the unit of observation is more homogeneous, TFP continues to be an important determinant of both the growth of and the variation of output per worker.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 7715.

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Date of creation: 11 Feb 2008
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Handle: RePEc:pra:mprapa:7715

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Keywords: state physical capital; state human capital; state real output; state total factor productivity;

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Cited by:
  1. Gabriel Felbermayr & Jasmin Gröschl, 2014. "Within U.S. Trade And The Long Shadow Of The American Secession," Economic Inquiry, Western Economic Association International, vol. 52(1), pages 382-404, 01.
  2. Jakub Growiec, 2010. "On the measurement of technological progress across countries," National Bank of Poland Working Papers, National Bank of Poland, Economic Institute 73, National Bank of Poland, Economic Institute.
  3. Hernan Moscoso Boedo, 2007. "Optimal Technology and Development," 2007 Meeting Papers, Society for Economic Dynamics 144, Society for Economic Dynamics.
  4. Areendam Chanda & Bibhudutta Panda, . "Productivity Growth in Goods and Services Across The Heterogeneous States of America," Departmental Working Papers, Department of Economics, Louisiana State University 2014-10, Department of Economics, Louisiana State University.
  5. Areendam Chanda & Bibhudutta Panda, . "Productivity Growth in Goods and Services across US States: What can We Learn from Factor Prices?," Departmental Working Papers, Department of Economics, Louisiana State University 2011-16, Department of Economics, Louisiana State University.
  6. Areendam Chanda & Bibhudutta Panda, . "Unbalanced Productivity Growth in US States: Evidence from Factor Prices," Departmental Working Papers, Department of Economics, Louisiana State University 2012-04, Department of Economics, Louisiana State University.
  7. Jasmin Katrin Gröschl, 2013. "Gravity Model Applications and Macroeconomic Perspectives," ifo Beiträge zur Wirtschaftsforschung, Ifo Institute for Economic Research at the University of Munich, Ifo Institute for Economic Research at the University of Munich, number 48, 8.
  8. Kondo, Illenin O., 2013. "Trade Reforms, Foreign Competition, and Labor Market Adjustments in the U.S," International Finance Discussion Papers, Board of Governors of the Federal Reserve System (U.S.) 1095, Board of Governors of the Federal Reserve System (U.S.).
  9. Tamura, Robert & Simon, Curtis & Murphy, Kevin M., 2012. "Black and White Fertility, Differential Baby Booms: The Value of Civil Rights," MPRA Paper 40921, University Library of Munich, Germany.
  10. Turner, Chad & Tamura, Robert & Schoellman, Todd & Mulholland, Sean, 2011. "Estimating Physical Capital and Land for States and Sectors of the United States, 1850-2000," MPRA Paper 32847, University Library of Munich, Germany.
  11. Jakub Growiec, 2012. "The World Technology Frontier: What Can We Learn from the US States?-super-," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 74(6), pages 777-807, December.
  12. Laura Obreja BraÅŸoveanu, 2012. "Correlation Between Government and Economic Growth - Specific Features for 10 Nms," Journal of Knowledge Management, Economics and Information Technology, ScientificPapers.org, ScientificPapers.org, vol. 2(5), pages 14, October.

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