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We analyze the impact of fiscal decentralization on U.S. county population, employment, and real income growth. Our findings suggest that government organization matters for local economic growth, but that the impacts vary by government unit and by economic indicator. We find that single-purpose governments per square mile have a positive impact on metropolitan population and employment growth, but no significant impact on nonmetropolitan counties. In contrast, the fragmentation of general-purpose governments per capita has a negative impact on employment and population growth in nonmetropolitan counties. Our results suggest that local government decentralization matters differently for metropolitan and nonmetropolitan counties.

Human capital is one factor that significantly influences local economic growth. Our goal in this research is to analyze trends in local human capital dynamics during the past thirty years. The authors find little evidence of convergence in college attainment across metropolitan and nonmetropolitan areas and evidence of divergence across Census regions. The authors also find within-distribution divergence for all labor markets, as well as for metropolitan and nonmetropolitan areas, which is accompanied by lower levels of intra-distributional mobility than we observe for the income distribution. To the extent that human capital accumulation drives growth, these trends are likely to contribute to increasingly different levels of income growth across labor markets in the future. Finally, looking at factors that influence upward mobility within the distribution, the authors find that an increase in the number of four-year colleges and universities per capita increased a labor market’s upward rank and quintile mobility in human capital.

This research analyzes manufacturing growth and decline across metropolitan and nonmetropolitan regions during the 1972–2002 period. We decompose real value added growth across local labor market areas in the lower 48 U.S. states into contributions from labor, capital, and total factor productivity. We then estimate a model describing the long-run growth of labor, capital, and productivity and find that increased productivity increases the growth of labor and capital, as well as a positive correlation between labor and capital stock growth. We also find evidence that human capital investment and agglomeration economies encourage productivity growth, while unionization discourages it.

This article analyzes determinants of growth across labor markets in the United States, using a production function approach based on four inputs: labor, manufacturing investment, human capital investment, and public capital investment. We find little role for public capital investment in growth, but that manufacturing investment spurred growth in nonmetropolitan areas, in contrast to metropolitan areas. We also find that human capital investment mattered more for metropolitan areas than for nonmetropolitan areas. Further, the presence of more colleges and universities, more household amenities, and lower tax rates are all found to have encouraged human capital accumulation in U.S. labor markets. Copyright 2008, Oxford University Press.

The federal Office of Management and Budget’s (OMB) periodic releases of updated metropolitan statistical area (MSA) definitions garner significant attention from local economic development professionals and policymakers. This paper tests the hypothesis that the MSA designation influences local growth, using OMB designations released since 1980 and data on per capita personal income, population, and employment. We find little evidence that the MSA designation influences long-term employment or per capita income growth. However, we do find evidence suggestive of a short-run impact on employment growth and more significant impacts on population growth.

The authors find evidence of income convergence across all substate labor markets in the lower forty-eight U.S. states during the 1969 to 1999 period. However, convergence is not expressed in a uniform way across metropolitan/nonmetropolitan regions, across time periods, or across census regions. The authors show that catching up within the distribution is more common for nonmetropolitan regions than for metropolitan regions. Furthermore, the largest metropolitan regions show strong tendencies to converge toward the bottom of their income distribution while at the same time showing comparatively little distributional mobility. This contrasts with results for the smallest nonmetropolitan regions, which show no evidence of convergence but high levels of intradistributional mobility. The authors also examine the relationship between human capital accumulation and industry mix and subsequent distributional mobility. The results suggest that educational attainment is positively correlated with growth for metropolitan regions, but it appears to be less correlated with upward mobility within the nonmetropolitan distribution.

We examine the mobility and modality trends in US state per capita personal income (and its components) during the 1929-1999 period. We find strong evidence of convergence for states, but that the tendency towards convergence (and the associated mobility within the distribution) varies during the period and especially for the 1980s. Our analysis of convergence by income component suggests that transfer income contributes more to the observed convergence than does asset income. We also note that distributional mobility need not be accompanied by high rank mobility and find that trends toward convergence in the US have tended to preserve rank ordering. Cet article cherche a examiner les tendances de mobilite et de modalitequant aux revenus personnels par tete (et a ses composants) aux Etats-Unis pendant la periode qui va de 1929 a1999. Il s'avere de fortes preuves d' une convergence entre Etats qui varie au cours de la periode etudiee (et qui va de pair avec une variation de la mobilite associee au sein de ...

This research examines the trend in retail and services capture, as measured by location quotients, in counties throughout the South from 1969 to 1997. Analysis indicates that location quotients have been falling on average in nonmetropolitan and trade shed counties in the retail and services industries. However, location quotient values have not, in general, been converging to any particular value. Further, there is substantial mobility (both upward and downward) in county location quotients over time. Both findings suggest that there is potential for success with public policy programs designed to help local communities capture more local spending.

The loss of the exchange rate as an independent policy instrument implied by EMU has spurred calls for an insurance scheme as a buffer against temporary, asymmetric shocks to national income. We study the potential properties of such a system using historical data from the 12 EC economies. An insurance scheme with reasonable properties can be implemented on the basis of a fairly complex econometric formula. Simplifying the computation of the transfers severely worsens the performance of the system, however. Forcing the system to balance financially is not a critical constraint. The simulations show that stabilizing asymmetric shocks around a common trend may amplify the univariate variance of GDP for some member countries.