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- December 1, 2013: Vol. 25, Number 11

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Where America is headed

by Claude Gruen

 

For more than 100 years, the movement of workers from poorer to richer states has pulled up the per capita incomes of both richer and poorer regions and lessened inter-regional income inequalities. A Harvard University paper titled Why Has Regional Convergence in the U.S. Stopped? shows this connection between rich and poorer regions has been severed since the 1970s. The paper defines the historic relationship whereby the economic prosperity of some regions increased income growth in all regions as “income convergence.” Consider an example of income convergence before and after the disconnect. In 1940, the per capita income in Connecticut was 4.37 times larger than per capita income in Mississippi. By 1960, that multiple had fallen to 2.28. In 1980, the multiple had fallen to 1.76. But, 30 years later in 2010, the multiple between the per capita incomes of these two states stood at 1.77.

The paper offers statistically backed mathematic

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