Have Per Capita Earnings and Income Converged across New England?

Abstract

This article describes an analysis of recent change in both per capita earnings from employment and per capita income (including that from transfers and nonearnings sources) across New England's counties between 1970 and 2000. Breaking the period into three decade-long spans (1970-1980, 1980-1990, and 1990-2000), statistical evidence is strong that the region experienced "absolute divergence" in both earnings and income. However, further statistical analysis that incorporates cost of living, human capital, and other control factors indicates that "conditional convergence" at the county scale in New England was ongoing rapidly between 1970 and 1990 and appears to have been achieved by 2000. Copyright 2006 Blackwell Publishing.

Regional Income Convergence in Appalachia: Exploring the Factors of Regional Economic Growth in a Transitioning Economy

“…Applied to the United States, conditional convergence has shown a strong presence in regions when studied nationally (Barro and Sala-I-Martin 1995;Higgins et al 2006) with additional evidence emerging at the sub-national level (Austin and Schmidt 1998;Rapino et al 2006). When applied to Appalachia, however, the convergence evidence is more mixed (Santopietro 2002;Gebremariam et al 2006;James and Moeller 2013).…”

“…At this level, convergence has been noted in New England (Rapino et al 2006) and the Great Plains (Austin and Schmit 1998), though results display a greater degree of sensitivity to local structural forces such as unearned income. In these regional studies, Appalachia is an interesting case, as it shows a disconnect with the strong convergence evidence in other regions and the larger United States.…”

“…In these national level studies, there is generally consistent evidence supporting convergence, though the strength, speed, and underlying drivers remain inconsistent (James and Campbell 2014). Subnationally, in New England and the Great Plains, there is evidence of convergence (Austin and Schmidt 1998;Rapino et al 2006), while limited studies of growth in Appalachia find more mixed, nuanced evidence (Santopietro 2002;Bukenya et al 2002;Gebremariam et al 2006). An explanation of this break from the larger neo-classically driven convergence process may come from Appalachia's historic role as a periphery to the national economy.…”

Sustained Firm Growth and Regional Income Convergence

“…Whether conditional or unconditional, these models have been applied widely in the United States at the national, state, and local levels (Berry and Kaserman 1993;Austin and Schmidt 1998;Rey and Montouri 1999;P. Johnson and Takeyama 2001;Rupasingha, Goetz, and Freshwater 2002;Santopietro, 2002;Higgins, Levy, and Young 2006;Rapino, Spaulding, and Hanink 2006). Though evidence of convergence is generally present, model performance and predictor significance are sometimes inconsistent.…”