Regional Convergence in the United States: A State-Level Analysis

This paper examines regional economic convergence across the United States from 2005 to 2019 using a panel dataset. Drawing on state-level capital stock and gross investment estimates from Garofalo and Yamarik (2002), as well as data from the American Community Survey, Bureau of Labor Statistics, Federal Reserve Economic Data, and the Fraser Institute's Economic Freedom Index, this study explores β-convergence across states and regions. The analysis employs an augmented Solow growth model incorporating human capital and uses dummy variables to account for regional differences. The findings indicate evidence of β-convergence consistent with previous literature, suggesting that states with lower initial levels of economic development experience higher growth rates over time. Furthermore, investment rates, educational attainment, and regional factors play significant roles in determining the speed of convergence. These results contribute to the broader discourse on economic disparities in the U.S., offering insights into the policy implications of fostering regional economic growth and reducing structural inequalities.