Daniel W. Shoag
Kennedy School of Government
79 JFK Street
Cambridge, MA 02138
NBER Working Papers and Publications
|July 2017||Why Has Regional Income Convergence in the U.S. Declined?|
with Peter Ganong: w23609
The past thirty years have seen a dramatic decline in the rate of income convergence across states and in population flows to high-income places. These changes coincide with a disproportionate increase in housing prices in high-income places, a divergence in the skill-specific returns to moving to high-income places, and a redirection of low-skill migration away from high-income places. We develop a model in which rising housing prices in high-income areas deter low-skill migration and slow income convergence. Using a new panel measure of housing supply regulations, we demonstrate the importance of this channel in the data.
Published: Peter Ganong & Daniel Shoag, 2017. "Why Has Regional Income Convergence in the U.S. Declined?," Journal of Urban Economics, .