, Volume 45, Issue 2, pp 365-377

Income convergence in the United States: a tale of migration and urbanization

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Abstract

We use nonparametric distribution dynamics techniques to reassess the convergence of per capita personal income (PCPI) across U.S. states and across metropolitan (metro) and nonmetropolitan (nonmetro) 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.