CONVERGENCE AND THE U.S. STATES: A TIME-SERIES ANALYSIS*

ABSTRACT. After decades of apparent convergence, state and regional per capita earnings diverged between 1978 and 1988. A central tenet of the convergence hypothesis is that shocks to relative state and regional earnings, such as those of the 1978 to 1988 period, are transitory. We find evidence for convergence for the U.S. states and regions during the 1929 to 1990 period after allowing for a break in the rate at which the various states and regions were converging in 1946. An important finding of this research is that the US. states and regions achieved per capita earnings convergence by 1946.     

Creativity gaps and gender gaps: women,men and place in the United States

This article situates Florida's (2002) work on creative regions in the United States in the context of a critical discussion of place and gender and investigates the gender–class structure of his most and least creative regions. It analyzes the distribution of creative class, working class and service class occupations by gender within those 21 regions as well as earnings, household income, poverty and educational attainment using data from the US Census 2000. Women and men are compared within and across the two categories of most and least creative regions. The major finding is that the gender gap in earnings within categories of regions is larger than the creativity gap, i.e. the earnings gap within genders across regions. As new technology industries have been layered over old industries, altering spatial divisions of labor, gendered labor remains integrated in largely traditional ways.     

REGIONAL HETEROGENEITY IN WAGE DISTRIBUTIONS: EVIDENCE FROM SPAIN*

ABSTRACT Regional differences in real wages have been shown to be both large and persistent in the United States and the U.K., as well as in the economies of other countries. Empirical evidence suggests that wage differentials adjusted for the cost of living cannot only be explained by the unequal spatial distribution of characteristics determining earnings. Rather, average wage gap decomposition reveals the important contribution made by regional heterogeneity in the price assigned to these characteristics. This paper proposes a method for assessing regional disparities in the entire wage distribution and for decomposing the effect of differences across regions in the endowments and prices of the characteristics. The hypothesis forwarded is that the results from previous studies obtained by comparing average regional wages may be partial and nonrobust. Empirical evidence from a matched employer–employee dataset for Spain confirms marked differences in wage distributions between regions, which do not result from worker and firm characteristics but from the increasing role of regional differences in the return to human capital.     

Real wage rigidity in regional labor markets in the U.K., the U.S., and West Germany

"This paper examines the extent to which regional differences in wage rigidity exist and can help explain interregional differences in unemployment trends. Phillips-curve models of manufacturing wage inflation are estimated for the 10 largest states in the U.S., the 10 economic regions in the United Kingdom, and the 11 Lande in the Federal Republic of Germany over the 1971 to 1985 period. There is evidence of significant differences in the responsiveness of wage inflation to unemployment and the rate of change in consumer prices across the regions within each country and across the three nations."     

Modeling the Impact of Technological Innovation on Environmental Efficiency: A Spatial Panel Data Approach

Technological progress has widely been acknowledged as a key driver in the achievement of environmental sustainability, and a new concern has recently arisen for assessing the role of differences in regional innovation performances with respect to the pursuit of pollution targets. We investigate the impact of innovative activities on environmental efficiency at the regional level, adopting a spatial panel data approach to account for dependence between geographical observations and to get deeper insights into spatial knowledge spillovers arising from agglomeration economies. The spatial panel analysis covers 103 Italian provinces (equivalent to NUTS3 regions) on four major air pollutants (i.e., CO₂, CH₄, NMVOC, CO) over the 1995–2010 period. Our findings show that the state of local technology development, proxied by patents, has a positive impact on GDP emission efficiency and that its magnitude is higher for more localized pollutants as a result of larger spillover effects. Finally, to analyze the Italian North-South dualism of emission levels of pollutants, we offer a spillover effect study to emphasize the remarkable difference among effects in the territory. This calls for closer attention to the local relevance of the pollution damage when environmental impact of innovation strategies is to be evaluated.     

Regional Wage Rigidity: The European Union and United States Compared

In recent years it has been pointed out that regional unemployment disparities are much more entrenched across member states of the European Union (E.U.) than they are in the U.S. A 'conventional wisdom' has emerged to the effect that this difference is due in part to the greater degree of wage rigidity in E.U. regions. In this paper we explore this issue by estimating short run and long run real wage (in)flexibility for the regions in five core E.U. countries (Germany, France, Italy, the United Kingdom, and the Netherlands) and for the U.S. states for the period 1976–1994. We find that real wage (in)flexibility varies across regions both in the E.U. and the U.S., but that, on average, regional wages are no less flexible in E.U. core regions than in U.S. states. The paper also examines some of the possible correlates ofregional variations in wage (in)flexibility.     

EMU versus the regions? Regional convergence and divergence in Euroland

There is currently considerable interest in and debate overthe impact of increasing European economic and monetary integration(EMU) on the regions of the EU. Opinion is sharply divided overwhether EMU is leading to regional economic convergence or regionaleconomic divergence. This paper examines the theoretical argumentsand empirical evidence for these opposing views, and presentssome additional analysis of patterns of regional productivitytrends and employment growth over the period 1975–98.The picture that emerges is a complex one: whilst worker productivityshows only very weak convergence across the EU regions (a processwhich halted altogether after the mid-1980s), regional employmentgrowth has been sharply divergent. Although there is littlesupport for the claim that EMU will lead to regional convergence,these findings suggest that until much more detailed investigationof the specific impacts on particular types of region is undertaken,the regional implications of EMU will remain a contentious issue.     

Equilibrium and Economic Growth: Spatial Econometric Models and Simulations

Neoclassical theory assumes diminishing returns to capital and spatially constant exogenously-determined technological progress, although it is questionable whether these are realistic assumptions for modeling manufacturing productivity growth variations across European Union (E.U.) regions. In contrast, the model developed in this paper assumes increasing returns and spatially varying technical progress, and is linked to endogenous growth theory and particularly to 'new economic geography' theory. Simulations, involving 178 E.U.regions, show that productivity levels and growth rates are higher in all E.U. regions when the financially assisted (Objective 1) regions have faster output growth. This also reduces inequalities in levels of technology. Allowing the core regions to grow faster has a similar effect of raising productivity growth rates across the E.U., although inequality increases. Thus, the simulations are seen as an attempt to develop a type of 'computable geographical equilibrium' model which, as suggested by Fujita, Krugman, and Venables (1999), is the way theoretical economic geography needs to evolve in order to become a predictive discipline.     

Regional Efficiency in the European Union

This paper examines existing disparities in technical efficiency levels across the European regions over the period 1986–2002. The results reveal that technical efficiency is not randomly distributed across space in the European setting. On the contrary, the different tests performed highlight the presence of positive spatial autocorrelation and spatial heterogeneity in the distribution under consideration. In fact, we have detected several regional clusters characterized by similar efficiency levels distinguishing them from the rest of the sample. Nevertheless, the estimates carried out show the existence of a process of regional convergence in terms of technical efficiency during the study period. Our findings also reveal that factors such as the regional stock of capital per worker or the patterns of productive specialization are relevant in explaining the changes in technical efficiency experienced by the European regions between 1986 and 2002.     

Migration, Job Change, and Wage Growth: A New Perspective on the Pecuniary Return to Geographic Mobility

Abstract Using data from the National Longitudinal Survey of Youth 1979, this study examines the pattern of early career job mobility and migration in a sample of young male workers. Primary interest lies in the between–job wage change accompanying job transitions as well as the extended time–profile of migrant earnings. When the sample of job transitions is partitioned by education level, contemporaneous returns are found only for workers with twelve or less years of completed schooling. In contrast, highly educated workers demonstrate significant extended returns to migration with the bulk of pecuniary rewards accruing with a lag of nearly two years.     

FACTOR ACCUMULATION,EXTERNALITIES, AND ABSORPTIVE CAPACITY IN REGIONAL GROWTH: EVIDENCE FROM EUROPE

This paper proposes a model that incorporates capital accumulation and spatial spillovers across economies, while allowing for regional differences in absorptive capacity. This model is estimated using a sample of EU regions, over a period including the enlargement of the single‐market area in the middle of the first decade of the 21st century. Results confirm the relevance of local absorptive capacity that is directly linked with the process of making the most of externalities. Capital deepening reduced the role of capital in explaining the regional productivity gap, but was not enough to help lagging regions to equal the return to human capital investments reached by most advanced regions.     

How the Pueblos Got Their Sprachbund

Pueblo societies comprise a culture area, and a zone of linguistic convergence or Sprachbund, that encompassed four distinct language families. Pueblo groups are also quite genetically homogeneous. The general forces promoting or diluting cultural differences across groups are defined and given a preliminary weighting through time for Pueblo societies. The Neolithic demographic transition and the hierarchical society transition (defined herein) contribute to homogeneity across groups derived from a single descent group, but create differences among groups derived from different descent groups. High mobility across communities and across regions contributes to cultural similarities across phylogenetically defined groups, as may adaptation to similar environments. Pronounced tendencies towards within-group conformity and linguistic purism were probably late (i.e., early first-millennium ad) developments in the Pueblo world.     

RECESSIONARY SHOCKS AND REGIONAL EMPLOYMENT: EVIDENCE ON THE RESILIENCE OF U.K. REGIONS*

ABSTRACT We analyze the resilience of U.K. regions to employment shocks. Two basic notions of resilience are distinguished. With engineering resilience, there is an underlying stable growth path to which a regional economy rebounds following a shock. With ecological resilience, shocks can permanently affect the growth path of the regional economy. Our data set consists of quarterly employment series for 12 U.K. regions (NUTS I) for the period 1971–2010. Using a seemingly unrelated regression (SUR) model specification, we test for the relevance of (engineering) resilience of U.K. regional employment to the four recessionary shocks in our sample. It turns out that U.K. regions do indeed differ in their resilience, but that these differences mainly concern the initial resistance to these shocks and not so much the recovery stage. The SUR model does not allow shocks to have permanent effects and it also does not take the possibility of time differentiated shock spillovers between the 12 regions into account. To this end, we also estimate a vector error‐correction model (VECM) specification where employment shocks can have permanent effects and where also interregional employment linkages are included. We find that employment shocks typically have permanent effects when it concerns the own‐region effects. Permanent effects can also be found for the impact on other regions but the interregional effects are typically only significant for nearby regions.     

Regional inequality in the U.S.: Evidence from city-level purchasing power

Using quarterly data for 42 products over the period from 1990 to 2015, we find that there has been a large and growing dispersion of purchasing power across U.S. cities since 1990 and the dispersion varies widely across products. We also find that total factor productivity shock precedes or predicts the rise in regional inequality of purchasing power. We view that the growing regional inequality found in the purchasing power among U.S. cities might have proceeded after nationwide productivity shocks mainly by the cities with higher share of skilled workers through the products with more flexible price adjustments.     

REGIONAL EARNINGS INEQUALITY IN GREAT BRITAIN: EVIDENCE FROM QUANTILE REGRESSIONS*

ABSTRACT The increase in national earnings inequality in Great Britain over the last two decades has predominantly been a result of increasing earnings inequality within the regions of Great Britain, and not rising inequality between regions. However, there is a severe lack of empirical research exploring the evolution of earnings inequality within regions. This paper investigates the causes of rising within‐region inequality in Great Britain. It examines the changes that have taken place between 1976 and 1995, and regional quantile regressions are estimated to reveal those factors that have contributed to the rise in within‐region inequality.     

A NOTE ON THE DIFFERENTIAL REGIONAL EFFECTS OF INCOME INEQUALITY: EMPIRICAL EVIDENCE USING U.S. COUNTY‐LEVEL DATA

This note examines the correlation between income inequality and economic growth using a panel of income distribution data for 3,109 counties of the U.S. Using the System Generalized Method of Moments (GMM) approach, we find that for the entire sample of 3,109 counties, an increase in a county's level of inequality has a significant negative relationship with future economic growth. In reality, however, the magnitude, sign, and significance of this relationship is not necessarily uniform across all regions of the U.S., motivating the need to examine regional differentials in the relationship between inequality and growth. Consequently, we split our dataset into metropolitan and nonmetropolitan counties, into the eight Bureau of Economic Analysis regions, and into regions of different political affiliation and economic‐dependence typology. Our results show considerable heterogeneity in the relationship between inequality and growth across these regions.     

‘Rivalling the Metropolis’: cultural conflict between London and the regions c.1967–1973

ABSTRACT

As a contribution to this special issue on conflict and cultural production in twentieth century Britain, this article examines the relationship between London and the English regions in the second half of the 1960s. It argues that an excessive historical focus on the capital has been to the detriment of the regional scene. This was caused initially by journalistic accounts written in the period under consideration, which were dismissive of the regional city’s contribution and which subsequent historians have reproduced in their narratives. This article moves beyond the capital to revisit the regional city of the period in order to examine the extent to which it contained the features demonstrated by London in the mid-to-later 1960s. Both the ‘swinging’ period of 1964–1967 and the concomitant underground (1965–1973) are considered here and the argument made that the regions rather kept pace with the capital to an extent not seen before this decade. Journalistic accounts of the cities written in the period itself were symptomatic of London-based prejudice and a regional declinist paradigm, but the reality, as far as nightlife and experimental culture were concerned was rather more positive.     

REGIONAL INCOME EVOLUTION IN SOUTH AFRICA AFTER APARTHEID*

ABSTRACT South Africa is one of the wealthiest countries on the African continent. The high national level (and growth) of GDP per capita, however, masks significant differences in economic performance across South Africa's regions. This paper uses (spatial) Markov chain techniques to describe the evolution of the entire cross‐section regional income distribution in terms of its intra‐distributional characteristics during the post‐Apartheid period. The results indicate a heavily diverging regional income distribution. Relatively poor regions are likely to remain poor or become even poorer and the richest regions will maintain their lead in terms of income levels. Explicitly taking account of space furthermore shows that these high‐income regions are acting as local growth poles, absorbing economic activity from their immediate surroundings. Location, trade, education, and the variable fortune of the gold mining industry seem to be important determinants of the observed evolution.     

IMPACT OF RIGIONAL FACTORS ON PRODUCTIVITY IN CHINA*

ABSTRACT. The regional production environment in China is decomposed into five regional factors: education endowment, foreign direct investment, agglomeration, producer's market accessibility, and consumer's market accessibility. The impacts of these regional factors on the Chinese machinery building industry and food manufacture industry are estimated across 30 regions. The estimates are highly significant and show that these regional factors substantially affect regional productivity. Across regions and over time, the capital return rate is positively related to the ratio of the total regional factor impact to the wage rate.     

SPATIAL DISPERSION OF TECHNOLOGICAL INNOVATION: A CASE STUDY FOR THE NETHERLANDS BY MEANS OF PARTIAL LEAST SQUARES*

ABSTRACT. In this paper the impact of spatial and nonspatial variables on the innovation potential and innovativeness of (small) industrial firms in The Netherlands will be analyzed. Innovation potential and innovativeness will be conceived as latent variables which will be measured by a partial least squares approach. The variables reflecting innovation potential are notably input variables such as internal and external R&D, while innovativeness will be based on output indicators such as the number of product and process innovations. The regional dimension enters our analysis essentially at two levels. First, we will investigate whether more innovative firms are to some extent spatially biased (i.e., on the basis of intrafirm characteristics). Secondly, we will analyze the relevance of an indigenous regional impact, per se. In other words, we will examine whether firms with an equal innovation capacity will differ in actual (i.e., realized) innovativeness as a consequence of different regional conditions. For the first issue, our results indicate that not all regions are equally well-endowed with potentially innovative (small) firms. Our analysis even demonstrates that these firms are underrepresented in regions which are generally considered to offer the most favorable production environment. After compensating for these differences in the composition of the regional set of firms, we demonstrate that an indigenous regional impact per se cannot be identified in The Netherlands.