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

  • Matthew Higgins

    (Georgia State University)

  • Daniel Levy

    (Bar- Ilan University)

  • Andrew Young

    (University of Mississippi)

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
Date of revision:
Handle: RePEc:wpa:wuwpma:0505009
Note: Type of Document - pdf; pages: 47
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