Productivity growth in goods and services across the heterogeneous states of america

Areendam Chanda, Bibhudutta Panda

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7 Scopus citations

Abstract

In this study, we examine the importance of multifactor productivity (MFP) growth in goods and services for U.S. States during 1980-2007 by applying the dual growth accounting framework. We find that MFP growth was relatively high and converged in the goods sector, but was low and did not converge in services. Although low growth in MFP in services was due to declining real user cost, particularly in real estate services, the lack of convergence itself was due to variation in wage growth. We also document that while the gap between productivity and wage growth was higher in goods, the two series were more strongly correlated in services. Finally, states with higher initial human capital experienced higher growth in both sectors.

Original languageEnglish (US)
Pages (from-to)1021-1045
Number of pages25
JournalEconomic Inquiry
Volume54
Issue number2
DOIs
StatePublished - Apr 1 2016

Bibliographical note

Publisher Copyright:
© 2016 Western Economic Association International.

Copyright:
Copyright 2016 Elsevier B.V., All rights reserved.

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