Scandinavian Working Papers in Economics

Working Paper Series,
Trade Union Institute for Economic Research

No 156: Demographic and Per Capita Income Dynamics: A Convergence Study on Demographics, Human Capital, and Per Capita Income for the US States

Joakim Persson
Additional contact information
Joakim Persson: Trade Union Institute for Economic Research, Postal: FIEF, Wallingatan 38, SE-111 24 Stockholm, Sweden

Abstract: This paper finds that age distribution, educational attainment, and government size converge across the US states at rates rather similar to the convergence rate for per capita income. The main part of the paper takes age distribution variables as exogenous in conditional convergence regressions. Using panel data, the estimated partial relation between age and the subsequent growth rate of per capita income is hump-shaped and of quantitative importance. This result is robust to conditioning on other variables and appear not only to reflect capital-dilution. Another result is that average years of schooling has a positive effect on growth only if age distribution is controlled for. These findings are consistent with an explanation that the age distribution reflects the growth effects of human capital accumulated through experience.

Keywords: Age distribution; Economic growth; Convergence

JEL-codes: O11; O18; O47

41 pages, November 15, 1999

Note: A substantially revised version of the paper can be found om the authors personal homepage. http://www.fief.se/Personal%20sites/Joakim/joakim.htm

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