Income Convergence in the United States: A Tale of Migration and Urbanization
16 Pages Posted: 4 Nov 2008 Last revised: 5 Dec 2008
Date Written: December 4, 2008
We use non-parametric distribution dynamics techniques to reassess the convergence of per capita personal income (PCPI) across U.S. states and across metropolitan and nonmetropolitan portions of states for the period 1969-2005. The long-run distribution of PCPI is bimodal for both states and metro/nonmetro portions. Furthermore, the high income mode of the distribution across metro and nonmetro portions corresponds to the single mode of the long-run distribution across metro portions only. These results (polarization or club-convergence) are reversed when weighting by population. The long run distributions across people are consistent with convergence. Migration and urbanization are the forces behind convergence.
Keywords: convergence, migration, urbanization
JEL Classification: O51, R11, R23
Suggested Citation: Suggested Citation