Parametric and Non Parametric Testing for Income Convergence

Abstract

This paper examines the degree to which per capita incomes have converged across counties in West Virginia over the last thirty years. The increase in government transfers and, possibly, other government assistance programs would suggest that incomes in spatially dispersed regions/counties within nation-state should become similar over this period. However, the interrelation between business cycles, migration, employment structure and changes in per capita earnings over time reduces this possibility. Comparable county data are obtained for two dissmilar regions: southern and eastern panhandle. The empirical results differ across the different measurement techniques used, but in general, the findings concur with the conclusions reached by previous studies that the convergence observed in earlier decades was replaced by divergence in the 1980s

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