State Per-Capita Income Change Since 1950

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This book refutes prevailing theories that attribute post-1950 state per capita income convergence to (1) neo-classical adjustment mechanisms, (2) institutional sclerosis, and (3) southern industrialization. Wheat and Crown argue that southern income was low because of slavery's legacy—sharecropping, agricultural dependence, low urbanization, poor education, high Black population percentages, and low wage rates. The legacy's dominant feature was the sharecropper-tenant farmer system, which replaced slavery. Sharecropping was the foundation of southern poverty. Sharecropping's collapse, beginning around 1950, affected all of the other features of slavery's legacy. For example, millions of sharecroppers out-migrated from the South, shifting poverty to the North and lowering the South's Black percentage. This out-migration, white in-migration, and the civil rights movement jointly raised educational attainment in the South, further boosting southern income. Southern industrialization had only a marginally significant effect. In 1950's high income region, the West, the transport cost element in the price of manufactured goods shrank because of (1) transportation improvements and (2) rapid manufacturing growth, which reduced the need for long distance imports from the Manufacturing Belt. The resulting decline in the West's relative cost of living led to wage adjustments. Consequently, the West—despite having the highest manufacturing growth rates—had the nation's lowest per-capita income growth rates. Agricultural decline and educational gains stimulated income growth in the Plains. Nationally, per-capita employment gains were a strong influence.

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Editorial Reviews

Focuses on the rise of incomes in the southern states, where they have been lower than any other region since the Civil War. Identifies the legacy of slavery and other factors that have kept incomes low, and provides evidence that the rise over the past few decades is a result of the collapse of the sharecropper- tenant farmer system of agriculture. Other studies have examined the causes of income disparities, but few have considered the recent convergence, and none has proposed the end of sharecropping as the cause. Annotation c. Book News, Inc., Portland, OR (
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Product Details

Meet the Author

LEONARD F. WHEAT is an economist with the Economic Development Administration of the U.S. Department of Commerce.

WILLIAM H. CROWN is Associate Professor at Brandeis University.

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Table of Contents

1 Pre-Capita Income Convergence and Divergence 1
2 Empirical Studies Explaining Income 13
3 Theoretical Explanations of Income Convergence 35
4 Hypotheses and Preliminary Evidence 61
5 Methodology, Variables, and Correlation Findings 95
6 Regression Analysis 125
7 Further Analysis, Summary, and Conclusions 157
Bibliography 173
Index 177
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