Human capital and per capita product: A comparison of US states

Abstract.

This article analyzes the extent to which human capital differences can explain the differences in gross state product (GSP) per capita levels between the richer and poorer states of the US. It uses 1990 Census and Bureau of Economic Analysis data on educational attainment, wage levels of different segments of the labor force, and GSP to compare New York – our representative rich state – with the poorest third of the states. The findings indicate that human capital differences explain at least 49% of the observed difference in GSP per capita between New York and each of the poor states.