Growth and Convergence across the U.S.: Evidence from County-Level Data

Matthew J Higgins, Daniel Levy, Andrew Young

Research output: Contribution to journalArticlepeer-review

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
JournalReview of Economics and Statistics
StatePublished - Nov 2006

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