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On Persistent Poverty in a Rich Country

Author

Listed:
  • T. M. Tonmoy Islam

    () (Department of Economics, Elon University, 2075 Campus Box, Elon, NC 27244, USA)

  • Jenny Minier

    () (Department of Economics, University of Kentucky, 335 Gatton College, Lexington KY 40506, USA)

  • James P. Ziliak

    () (Center for Poverty Research and Department of Economics, University of Kentucky, Mathews Building Suite 300, Lexington KY 40506-0047, USA)

Abstract

We examine differences in income within the United States, and the regions of persistent poverty that have arisen, using a newly assembled county-level data set linking 19th century Census data with contemporary data. We identify the roles of current differences in aggregate production technologies and factor endowments, together with contributions of historical institutions, culture, geography, and human capital. We allow for possible cross-county factor mobility via a correlated random effects GMM estimator and find evidence of significant regional differences in production technologies. Our decompositions of the poor/nonpoor income gap suggest that at least three-fourths of the gap is explained by differences in productive factors. Persistently poor counties are different (and poorer) primarily because they have lower levels of factors of production, not because they use the factors they have less efficiently. Together, historical and contemporary human capital explain over half of the overall income gap between persistently poor and nonpoor counties.

Suggested Citation

  • T. M. Tonmoy Islam & Jenny Minier & James P. Ziliak, 2015. "On Persistent Poverty in a Rich Country," Southern Economic Journal, Southern Economic Association, vol. 81(3), pages 653-678, January.
  • Handle: RePEc:sej:ancoec:v:81:3:y:2015:p:653-678
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    File URL: http://dx.doi.org/10.4284/0038-4038-2012.243
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    Citations

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    Cited by:

    1. Ugo Troiano & Giacomo Ponzetto, 2012. "Social Capital, Government Expenditures, and Growth," 2012 Meeting Papers 1048, Society for Economic Dynamics.
    2. repec:gam:jsusta:v:10:y:2018:i:11:p:4316-:d:184380 is not listed on IDEAS
    3. repec:eee:ecolet:v:158:y:2017:i:c:p:67-72 is not listed on IDEAS
    4. T. M. Tonmoy Islam, 2016. "Estimating the Elasticity of Growth in the US Using the Generalized Means of Income," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 129(1), pages 95-112, October.
    5. Jonathan Eyer & Matthew E. Kahn, 2017. "Prolonging Coal’s Sunset: The Causes and Consequences of Local Protectionism for a Declining Polluting Industry," NBER Working Papers 23190, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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