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Unconditional Convergence in Manufacturing Productivity across U.S. States: What the Long-Run Data Show

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  • Klein, Alexander

    (University of Kent)

  • Crafts, Nicholas

    (University of Sussex)

Abstract

This paper examines long-run unconditional convergence of labour productivity in manufacturing across 48 contiguous U.S. states. For that purpose, we construct a detailed panel data set of state-industry pairs with over 120 industries covering the period 1880-2007. We find that unconditional -convergence in manufacturing productivity was pervasive and rapid – 7.6% per year in 1880-2007 – and that manufacturing accounts for most of the unconditional convergence contribution to overall productivity growth over the long run: 61% in 1880-1940 and 91% in 1958-2007. We also examined broad U.S. regions and found that in the South the contribution of unconditional -convergence in manufacturing to aggregate productivity growth before World War II was weak not because of a slower convergence rate but a much smaller manufacturing sector. This paper examines long-run unconditional convergence of labour productivity in manufacturing across 48 contiguous U.S. states. For that purpose, we construct a detailed panel data set of state-industry pairs with over 120 industries covering the period 1880-2007. We find that unconditional β-convergence in manufacturing productivity was pervasive and rapid – 7.6% per year in 1880-2007 – and that manufacturing accounts for most of the unconditional convergence contribution to overall productivity growth over the long run: 61% in 1880-1940 and 91% in 1958-2007. We also examined broad U.S. regions and found that in the South the contribution of unconditional β-convergence in manufacturing to aggregate productivity growth before World War II was weak not because of a slower convergence rate but a much smaller manufacturing sector.

Suggested Citation

  • Klein, Alexander & Crafts, Nicholas, 2023. "Unconditional Convergence in Manufacturing Productivity across U.S. States: What the Long-Run Data Show," CAGE Online Working Paper Series 660, Competitive Advantage in the Global Economy (CAGE).
    • Handle: RePEc:cge:wacage:660
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    Cited by:

    1. Bryan Hardy & Can Sever, 2023. "Innovation convergence," BIS Working Papers 1108, Bank for International Settlements.

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    More about this item

    Keywords

    convergence; economic growth; U.S. economic history; manufacturing belt JEL Classification: O47; N11; N12; R11;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • N11 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: Pre-1913
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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