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Why Has Regional Income Convergence in the U.S. Declined?

Listed author(s):
  • Peter Ganong
  • Daniel W. Shoag
Registered author(s):

    The past thirty years have seen a dramatic decline in the rate of income convergence across states and in population flows to high-income places. These changes coincide with a disproportionate increase in housing prices in high-income places, a divergence in the skill-specific returns to moving to high-income places, and a redirection of low-skill migration away from high-income places. We develop a model in which rising housing prices in high-income areas deter low-skill migration and slow income convergence. Using a new panel measure of housing supply regulations, we demonstrate the importance of this channel in the data.

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    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 23609.

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    Date of creation: Jul 2017
    Publication status: published as Peter Ganong & Daniel Shoag, 2017. "Why Has Regional Income Convergence in the U.S. Declined?," Journal of Urban Economics, .
    Handle: RePEc:nbr:nberwo:23609
    Note: DAE LS PE
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