Growth and Convergence across the U.S.: Evidence from County-level Data

We use U.S. county data (3,058 observations) and 41 conditioning variables to study growth and convergence. Using OLS and 3SLS-IV we report on the full sample and metro, non-metro, and 5 regional samples: 1) OLS yields convergence rates around 2 percent; 3SLS yields 6-8 percent; 2) Convergence rates vary (e.g., the Southern rate is 2.5 times the Northeastern rate); 3) Federal, state, and local government negatively correlates with growth; 4) The relationship between educational attainment and growth is nonlinear; and 5) The finance, insurance, and real estate industry and entertainment industry positively correlates with growth while education employment negatively correlates.