CONVERGENCE OF INCOME ACROSS PENNSYLVANIA COUNTIES

The neoclassical growth model implies that if two economies have the same preferences and technology, the poorer country will tend to grow faster in per capita terms. The relatively homogeneous counties of Pennsylvania provide an excellent test of the model's convergence predictions. There is no evidence of absolute convergence of income levels among Pennsylvania counties. The divergence between the very highest and very lowest income counties is due to changes in relative county wages. I utilize a set of panel data to properly account for individual effects, and find a conditional convergence rate of 2 percent.