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

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Author Info
Matthew Higgins (Georgia State University)
Daniel Levy (Bar- Ilan University)
Andrew Young (University of Mississippi)

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Abstract

We use county data with 3,058 observations to study growth and convergence in the US. We assess the effect of 40 conditioning variables on the counties’ balanced growth paths. Using OLS and 3SLS-IV, the later yielding consistent estimates, we report estimates for the full sample and for metro, non-metro, and five regional samples. We find that (1) OLS yields convergence rates around 2 percent, but 3SLS yields 6–8 percent; (2) convergence rates vary across the U.S. E.g., Southern counties converge 2½ times faster than Northeastern counties; (3) government size at all levels (federal, state and local) is negatively correlated with growth; (4) the relation between educational attainment and growth is nonlinear; and (5) large finance, insurance and real estate industry, and entertainment industry is positively correlated with growth but the population share employed in education is negatively correlated with growth.

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Paper provided by EconWPA in its series Macroeconomics with number 0505009.

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Length: 47 pages
Date of creation: 12 May 2005
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Handle: RePEc:wpa:wuwpma:0505009

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Related research
Keywords: Economic Growth; Convergence; Conditional Convergence; County- Level Data; 3SLS Instrumental Variables Estimate; Balanced Growth Path; Public Sector; Industry Composition; Educational Attainment;

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Find related papers by JEL classification:
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Regional, Urban, and Rural Analyses
O51 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes
H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General

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Full references

Cited by:
(explanations, 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.)

  1. Andrew Young & Matthew Higgins & Daniel Levy, 2004. "Heterogeneity in Convergence Rates and Income Determination across U.S. States: Evidence from County-Level Data," Development and Comp Systems 0402003, EconWPA. [Downloadable!]
    Other versions:
  2. Strobl, Eric, 2008. "The Economic Growth Impact of Hurricanes: Evidence from US Coastal Counties," IZA Discussion Papers 3619, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Paul W. Bauer & Mark E. Schweitzer & Scott Shane, 2006. "State growth empirics: the long-run determinants of state income growth," Working Paper 0606, Federal Reserve Bank of Cleveland. [Downloadable!]
  4. Matthew Higgins & Daniel Levy & Andrew Young, 2004. "Many Types of Human Capital and Many Roles in U.S. Growth: Evidence from County-Level Educational Attainment Data," Emory Economics 0402, Department of Economics, Emory University (Atlanta). [Downloadable!]
    Other versions:
  5. Belal Fallah & Mark Partridge, 2007. "The elusive inequality-economic growth relationship: are there differences between cities and the countryside?," The Annals of Regional Science, Springer, vol. 41(2), pages 375-400, June. [Downloadable!] (restricted)
  6. 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. [Downloadable!]
    Other versions:
  7. Yogi Vidyattama, 2007. "The Determinants of Provincial Growth in Indonesia During 1983-2003," DEGIT Conference Papers c012_044, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
  8. Matthew J. Higgins & Daniel Levy & Andrew T. Young, 2008. "Federal, State, and Local Governments: Evaluating their Separate Roles in US Growth," Emory Economics 0801, Department of Economics, Emory University (Atlanta). [Downloadable!]
    Other versions:
  9. Pede, Valerien O. & Florax, Raymond J.G.M. & de Groot, Henri L.F., 2006. "The Role of Knowledge Externalities in the Spatial Distribution of Economic Growth: A Spatial Econometric Analysis for US Counties, 1969–2003," 2006 Annual meeting, July 23-26, Long Beach, CA 21157, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  10. Matthew J. Higgins & Daniel Levy & Andrew T. Young, 2007. "Robust Correlates of County-Level Growth in the U.S," Emory Economics 0708, Department of Economics, Emory University (Atlanta). [Downloadable!]
    Other versions:
  11. David E. A. Giles & Chad Stroomer, 2003. "Does Trade Openness Affect the Speed of Output Convergence? Some Empirical Evidence," Econometrics Working Papers 0307, Department of Economics, University of Victoria. [Downloadable!]
    Other versions:
  12. Young, Andrew & Higgins, Matthew & Levy, Daniel, 2006. "Heterogeneous Convergence," MPRA Paper 954, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  13. Marcel Fafchamps & Klaus Desmet, 2003. "Employment Concentration across US Counties," Economics Series Working Papers 180, University of Oxford, Department of Economics. [Downloadable!]
    Other versions:
  14. Andrew Young & Matthew Higgins & Daniel Levy, 2005. "Sigma-Convergence Versus Beta-Convergence: Evidence from U.S. County-Level Data," Macroeconomics 0505008, EconWPA. [Downloadable!]
    Other versions:
  15. Matthew Higgins & Daniel Levy & Andrew Young, 2003. "Sigma Convergence Versus Beta Convergence: Evidence from County-Level Data," Emory Economics 0316, Department of Economics, Emory University (Atlanta). [Downloadable!]
  16. Mihai Nica, 2004. "Convergence in Mississippi: A Spatial Approach," Urban/Regional 0408007, EconWPA. [Downloadable!]
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