Regional Convergence in per Capita Personal Income in the US and Canada
This study examines regional convergence in per capita personal income in the US and Canada. We find that the disparity in real per capita income levels across US states (Canadian provinces) has declined, but income levels are not identical. Income levels become more aligned once costs of living are accounted for in relative per capita income series. US states (Canadian provinces) converge at an annual rate of between 1.3% and 2.04% (between 2.15% and 2.37%). A pattern of σ and β-convergence in per capita personal income across regions evident over the entire sample period, is reversed over 1979-1989 (1976-1990) period. The reversal may be due to sectoral or region-specific shocks that have highly persistent effects. The latter explanation might be true for half of the US and most of Canada.
[1] C. Sherwood-Call, "The 1980s divergence in state per capita incomes:
what does it tell us?," Federal Reserve Bank of San Francisco, 1994
[2] C. Siriopoulos and D. Asteriou, (1998), Testing for Convergence Across
the Greek Regions," Regional Studies, Taylor and Francis Journals, vol.
32 (6), pp. 537-546.
[3] E. Moore. and A. Skaburskis, "Canada-s increasing housing
affordability burdens," Housing Studies, vol.19, 2004, pp. 395-413.
[4] F.C Lee and S. Coulombe, "Regional productivity convergence in
Canada," Canadian Journal of Regional Science, vol.18, 1995, pp. 39-
56.
[5] G. A. Carlino and L. Mills, "Are U.S. regional incomes converging? A
time-series analysis," Journal of Monetary Economics, vol. 32, 1993, pp.
335-346.
[6] G. A. Carlino and L. Mills, "Testing neoclassical convergence in
regional incomes and earnings," Regional Science and Urban
Economics, vol. 26, 1996, pp. 416-418.
[7] J. Helliwell, "Convergence and migration among provinces," Policy and
Economic Analysis Program Study, 94-2, University of Toronto, 1994.
[8] J. Helliwell and A. Chung, "Are bigger countries better off?," in R.
Boadway, T. Courchene and D. Purvis (eds.), Economic dimension of
constitutional change, Kingston, 1991, John Deutsch Institute
[9] J. H. L. Dewhurst, "Convergence and divergence in regional household
incomes per head in the United Kingdom: 1984 - 93," Applied
economics, vol.30, 1995, pp. 31-35.
[10] J. Persson, "Convergence in per capita income and migration across the
Swedish counties: 1906-1990," Institute for International Economic
Studies, Stockholm University, 1994.
[11] J. Sachs and A. Warner, "Economic reform and the process of global
integration," Brookings papers on economic activity, vol.1, 1995, pp. 1-
118.
[12] L. Mauro, and E. Podrecca, "The case of Italian regions: Convergence or
dualism," Economics Notes, vol.3, 1994, pp. 447-468.
[13] M. Chatterji, and J. H. Ll. Dewhurst, (1996), Convergence Clubs and
Relative Economic Performance in Great Britain: 1977--1991, Regional
Studies, Taylor and Francis Journals, vol. 30 (1), pp 31-39. Available:
http://ideas.repec.org/a/taf/regstd/v30y1996i1p31-39.html
[14] M. Gunderson, "Regional productivity and income convergence in
Canada under increasing economic integration," Working paper at the
Centre for Industrial Relations., University of Toronto, 2006.
[15] M. Lefebvre, "Les provinces canadiennes et la convergence : une
évaluation empirique," Working paper 94-10, Bank of Canada, 1994.
[16] N.G. Mankiw, D. Romer, and D. N. Weil, "A contribution to the
empirics of economic growth," Quarterly Journal of Economics,
vol.106, 1992, pp. 407-37.
[17] R. Barro, "Economic growth in a cross-section of countries," Quarterly
Journal of Economics, vol. 105, 1991, pp. 407-443.
[18] R.J. Barro and X. Sala-i-Martin, "Convergence across states and
regions," Brookings papers on economic activity, vol.1, 1991, pp. 107-
182.
[19] R.J. Barro and X. Sala-i-Martin, "Convergence", Journal of Political
Economy, vol.100, 1992, pp. 223-51.
[20] R. Summers and A. Heston, 1993, The Penn World Table,
[21] S. Coloumbe and F. Lee, "Convergence across Canadian provinces:
1961-1991," Canadian Journal of Economics, vol.10, 1995, pp. 886-
898.
[22] W. J. Baumol, "Productivity growth, convergence and welfare: what the
long-run data shows," American Economic Review, vol. 76 (5), 1986, pp.
1072-1085.
[23] F. Lee, "Convergence in Canada", Canadian Journal of Economics, vol.
29, 1996, pp. 331-336.
[1] C. Sherwood-Call, "The 1980s divergence in state per capita incomes:
what does it tell us?," Federal Reserve Bank of San Francisco, 1994
[2] C. Siriopoulos and D. Asteriou, (1998), Testing for Convergence Across
the Greek Regions," Regional Studies, Taylor and Francis Journals, vol.
32 (6), pp. 537-546.
[3] E. Moore. and A. Skaburskis, "Canada-s increasing housing
affordability burdens," Housing Studies, vol.19, 2004, pp. 395-413.
[4] F.C Lee and S. Coulombe, "Regional productivity convergence in
Canada," Canadian Journal of Regional Science, vol.18, 1995, pp. 39-
56.
[5] G. A. Carlino and L. Mills, "Are U.S. regional incomes converging? A
time-series analysis," Journal of Monetary Economics, vol. 32, 1993, pp.
335-346.
[6] G. A. Carlino and L. Mills, "Testing neoclassical convergence in
regional incomes and earnings," Regional Science and Urban
Economics, vol. 26, 1996, pp. 416-418.
[7] J. Helliwell, "Convergence and migration among provinces," Policy and
Economic Analysis Program Study, 94-2, University of Toronto, 1994.
[8] J. Helliwell and A. Chung, "Are bigger countries better off?," in R.
Boadway, T. Courchene and D. Purvis (eds.), Economic dimension of
constitutional change, Kingston, 1991, John Deutsch Institute
[9] J. H. L. Dewhurst, "Convergence and divergence in regional household
incomes per head in the United Kingdom: 1984 - 93," Applied
economics, vol.30, 1995, pp. 31-35.
[10] J. Persson, "Convergence in per capita income and migration across the
Swedish counties: 1906-1990," Institute for International Economic
Studies, Stockholm University, 1994.
[11] J. Sachs and A. Warner, "Economic reform and the process of global
integration," Brookings papers on economic activity, vol.1, 1995, pp. 1-
118.
[12] L. Mauro, and E. Podrecca, "The case of Italian regions: Convergence or
dualism," Economics Notes, vol.3, 1994, pp. 447-468.
[13] M. Chatterji, and J. H. Ll. Dewhurst, (1996), Convergence Clubs and
Relative Economic Performance in Great Britain: 1977--1991, Regional
Studies, Taylor and Francis Journals, vol. 30 (1), pp 31-39. Available:
http://ideas.repec.org/a/taf/regstd/v30y1996i1p31-39.html
[14] M. Gunderson, "Regional productivity and income convergence in
Canada under increasing economic integration," Working paper at the
Centre for Industrial Relations., University of Toronto, 2006.
[15] M. Lefebvre, "Les provinces canadiennes et la convergence : une
évaluation empirique," Working paper 94-10, Bank of Canada, 1994.
[16] N.G. Mankiw, D. Romer, and D. N. Weil, "A contribution to the
empirics of economic growth," Quarterly Journal of Economics,
vol.106, 1992, pp. 407-37.
[17] R. Barro, "Economic growth in a cross-section of countries," Quarterly
Journal of Economics, vol. 105, 1991, pp. 407-443.
[18] R.J. Barro and X. Sala-i-Martin, "Convergence across states and
regions," Brookings papers on economic activity, vol.1, 1991, pp. 107-
182.
[19] R.J. Barro and X. Sala-i-Martin, "Convergence", Journal of Political
Economy, vol.100, 1992, pp. 223-51.
[20] R. Summers and A. Heston, 1993, The Penn World Table,
[21] S. Coloumbe and F. Lee, "Convergence across Canadian provinces:
1961-1991," Canadian Journal of Economics, vol.10, 1995, pp. 886-
898.
[22] W. J. Baumol, "Productivity growth, convergence and welfare: what the
long-run data shows," American Economic Review, vol. 76 (5), 1986, pp.
1072-1085.
[23] F. Lee, "Convergence in Canada", Canadian Journal of Economics, vol.
29, 1996, pp. 331-336.
@article{"International Journal of Business, Human and Social Sciences:50882", author = "Ilona Shiller", title = "Regional Convergence in per Capita Personal Income in the US and Canada", abstract = "This study examines regional convergence in per capita personal income in the US and Canada. We find that the disparity in real per capita income levels across US states (Canadian provinces) has declined, but income levels are not identical. Income levels become more aligned once costs of living are accounted for in relative per capita income series. US states (Canadian provinces) converge at an annual rate of between 1.3% and 2.04% (between 2.15% and 2.37%). A pattern of σ and β-convergence in per capita personal income across regions evident over the entire sample period, is reversed over 1979-1989 (1976-1990) period. The reversal may be due to sectoral or region-specific shocks that have highly persistent effects. The latter explanation might be true for half of the US and most of Canada.
", keywords = "regional convergence, regional disparities, per capita
income.", volume = "3", number = "7", pages = "1385-10", }
