A note on the US regional and sectoral convergence.

Abstract

This study examines labor productivity convergence across the U.S. states for seven major economic sectors from 1987 to 2013. We follow two different approaches; the first one uses cross-section techniques such as beta and sigma convergence analysis and the second adopts panel methods (stochastic convergence) taking advantage of recent developments in panel unit root tests. The results from beta-convergence analysis show evidence of convergence for Mining, Construction, Manufacturing, Transportation and Trade while, according to sigma convergence approach only Construction has a clear trend of convergence. The results from panel methods are contradictory for the Construction sector when our last and more modern unit root test is employed. Finally, Manufacturing seems to exhibit the strongest evidence of convergence in respect to beta and stochastic convergence methods followed by Mining.