
Why Has Regional Income Convergence in the U.S. Declined? [pdf] - dbcooper
https://scholar.harvard.edu/files/shoag/files/why_has_regional_income_convergence_in_the_us_declined_01.pdf
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dbcooper
> The past thirty years have seen a dramatic decline in the rate of income
> convergence across states and in population flows to wealthy places. These
> changes coincide with (1) an increase in housing prices in productive areas,
> (2) a divergence in the skill-specific returns to living in those places,
> and (3) a redirection of unskilled migration away from productive places. We
> develop a model in which rising housing prices in wealthy areas deter
> unskilled migration and slow income convergence. Using a new panel measure
> of housing supply regulations, we demonstrate the importance of this channel
> in the data. Income convergence continues in less-regulated places, while it
> has mostly stopped in places with more regulation.

