Growth and convergence across the United States: Evidence from county-level data

Matthew J. Higgins, Daniel Levy, Andrew T. Young

Research output: Contribution to journalArticle

112 Scopus citations

Abstract

We use U.S. county data (3,058 observations) and 41 conditioning variables to study growth and convergence. Using ordinary least squares (OLS) and three-stage least squares with instrumental variables (3SLS-IV), we report on the full sample and metro, nonmetro, and and regional samples: (1) OLS yields convergence rates around 2%; 3SLS yields 6%-8%; (2) convergence rates vary (for example, the Southern rate is 2.5 times the Northeastern rate); (3) federal, state, and local government negatively correlates with growth; (4) the relationship between educational attainment and growth is nonlinear; and (5) the finance, insurance, and real estate industry and the entertainment industry correlate positively with growth, whereas education employment correlates negatively.

Original languageEnglish
Pages (from-to)671-681
Number of pages11
JournalReview of Economics and Statistics
Volume88
Issue number4
DOIs
StatePublished - Nov 2006

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